Gold futures saw a huge rise of Rs 1,493, crossing the critical Rs 96,000 per 10 grams mark on Monday, driven by rising global demand.
On the Multi Commodity Exchange (MCX), gold contracts due for June delivery continued their stellar run for a third straight day, going up by Rs 1,493, or 1.57%, to an all-time high of Rs 96,747 per 10 grams in early trade.
It thereafter retreated from the record-high to Rs 96,600 per 10 grams, up by Rs 1,346, or 1.41%, with an open interest of 21,540 lots.
Likewise, the August contract jumped by Rs 1,464, or 1.53%, to a new all-time high of Rs 97,360 per 10 grams on the MCX. It should be noted that commodity markets were shut last Friday on account of Good Friday.
Market analysts said that rising tensions in trade between the United States and China have raised worldwide uncertainty, prompting investors to search for safe-haven assets such as gold. So long as the trade war between the world's two largest economies continues without solution, bullish gold momentum is set to continue.
Internationally, gold futures touched a record high of USD 3,400.86 per ounce. Rahul Kalantri, Mehta Equities Ltd's Vice-President of commodities, said, "Gold rose to a new record high, driven by a declining US dollar and safe-haven buying amidst concerns around global trade."
He also elaborated that the US dollar declined to a two-year low following President Donald Trump's series of attacks on US Federal Reserve Chairman Jerome Powell last Thursday, with speculation surrounding possible replacement of Powell—an action that would have far-reaching implications on the Fed's independence and world financial markets.
Also, Kalantri pointed out that the European Central Bank (ECB) reduced interest rates by 25 basis points, which further supported gold prices. He summed up, "Gold is showing significant volatility, and only positive news in the US-China trade talks can soften the precious metal's gains. Otherwise, it will likely to continue its upward trend."
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