Gold prices rose amid increased tensions between US and China. China vowed a counter attack on President Trump announcement of additional tariff goods worth $300 billion.
Gold COMEX surged to a six-year high at $1465 per ounce while, Gold MCX October skyrocketed to its all-time high of Rs36870/10grams.
Gold have turned out to be darling asset class for this year, having gained by more than 12% since May this year and have potential to continue its outperformance for remainder part of this year. It is mainly benefiting from concerns about the outlook for global growth, which will make key central banks of the world to turn more accommodative further.
Recent crash in the German bund yield to a record low of -0.57 and plunging US 10-Year bond yield to hit a 2½-Year low of 1.8% certainly have made current rates more expensive, opening the room for further reduction in the rates, especially in the United States.
Coming to the domestic market, steep fall in the rupee’s value from 69.4 to 71 mark in just two days has made gold in India more expensive. If global woes continue, further cut in the value of rupee can’t be ruled out that will infuse more buying in domestic gold.