Economy

Gold inches up on sustained trade war concerns

Gold inches up on sustained trade war concerns

Among other precious metals, silver inched up 0.4% to $16.46 an ounce, platinum fell 0.7% at $846.78 and palladium rose 1.2% to $1,431.13. The move extends this year's climb to 19%, with gains underpinned by inflows into exchange-traded funds and central bank purchases.

According to the All India Sarafa Association, in the national capital, gold of 99.9 per cent and 99.5 per cent purity surged Rs 550 each to Rs 38,470 per 10 gram and Rs 38,300 per 10 gram, respectively. The yellow metal's prices shot up to a near six-year high on Wednesday, 7th August.

Global cues, such as sustained trade war concerns and a massive fall in the Chinese yuan and other emerging markets (EMs) currencies, affected the gold price volatility.

"Gold is quite clearly still in demand as a safe haven in the current market environment", said analysts at Commerzbank, quoted in Financial Times.

Spot gold rose 0.5% to $1,470.91 an ounce as of 11:02 am EDT (1502 GMT), after hitting a session high of $1,474.81, its highest since May 2013.

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Silver ready climbed Rs 630 to 44,300 per kg, while weekly-based delivery jumped Rs 745 to Rs 43,730 per kg.

Last month, the Fed reduced borrowing costs for the first time in more than a decade, responding in part to the impact of the trade war. Lower interest rates further boost the appeal of gold. Goldman Sachs Group Inc. expects that there will be a total of three US rate reductions this year.

India is the world's second-biggest consumer of gold.

Yields have been turning negative on government bonds as fears about the global economy have increased. Billionaire hedge-fund manager Ray Dalio has suggested the market may just be at the start of a period that would be very positivefor gold. Influential Wall Street bank Goldman Sachs said it no longer expects Washington and Beijing to agree on a truce to end their prolonged trade dispute before the November 2020 Presidential election. "China deal in the medium term", Jingyi Pan, a strategist at IG Asia Pte in Singapore, said in an email.