Gold prices surged Friday amid US-China trade war and interest rate cut by the US Federal Reserve on Jul 31. Gold prices jumped 0.62 per cent to Rs 35,132 per 10 gram in futures trade today.
Gold prices surged Friday amid US-China trade war and interest rate cut by the US Federal Reserve on Jul 31. Yesterday the prices slumped after Jerome Powell indicated towards an unlikely rate cut in a series, but after the US President Donald Trump said he would impose additional tariffs on Chinese goods from September, a sharp rally was seen in the yellow metal prices. Besides, the global slowdown concerns, riskier equity markets also driving gold prices, according to analysts Financial Express Online spoke with.
Gold prices jumped 0.62 per cent to Rs 35,132 per 10 gram in futures trade Friday. On the Multi Commodity Exchange, gold for delivery in August contracts traded higher by Rs 216, or 0.62 per cent, to Rs 35,132 per 10 gram in a business turnover of 3,459 lots. The yellow metal contracts for October delivery also traded higher by Rs 232, or 0.65 per cent, to Rs 35,865 per 10 gram in a business turnover of 21,530 lots, according to PTI.
The US President Donald Trump said Thursday that he plans to impose a 10% tariff on $300 billion of Chinese imports from September 1. He warned China of a further rise in tariffs if China’s President Xi Jinping fails to finalise a trade deal between the two economic giants.
“Gold prices saw a sharp surge yesterday after the US President said additional trade duty would be levied on Chinese goods from next month. Lower equity markets and recent interest rate cut by the US Federal Reserve also led to an increase in gold prices. The global economic slowdown is also supporting prices. Gold prices are likely to get a boost in the range of Rs 36500-36850 per ten gram. This is the right to buy gold,” Ajay Kedia, Director, Kedia Commodity told Financial Express Online.
In a surprise escalation of trade friction by the US administration, the gold prices may stay supportive in a day session. However, from higher levels, the possibility of technical correction can’t be ruled out, Jigar Trivedi, Fundamental Analyst – Commodities told Financial Express Online. Traders will continue to monitor developments into the same matter since the Chinese response is awaited. Moreover, the US will release monthly trade balance, non-farm payrolls and unemployment rate in the evening. Hence the entire session will be volatile for the yellow metal, Trivedi further added.
“The gold prices surged after the US announced its plans to raise tariffs on Chinese imports. Internationally also gold prices rallied by 40 dollars. We are seeing a fall in equity markets also and the rupee has also depreciated sharply which are supportive for gold buying. The gold October futures were close to Rs 35,800 per ten gram which may go up to Rs 36,200 on the higher side. So this is a good time to buy gold. month it was close to 35,800,” Amit Sajeja, Associate Vice President with Motilal Oswal Financial Services told Financial Express Online.