Gold prices made a massive jump by ₹3,200 to touch a new lifetime high of ₹1,34,800 per 10 grams in New Delhi on Friday, ahead of festive buying by jewelers and retailers as the occasion of Dhanteras approaches.
The precious metal of 99.9 per cent purity had ended at ₹1,31,600 per 10 grams in the previous session.
In tandem, gold of 99.5 per cent purity also jumped by ₹3,200 to scale an all-time high of ₹1,34,200 per 10 grams (inclusive of all taxes), up from Thursday's close of ₹1,31,000 per 10 grams.
Dhanteras, considered an auspicious day in Hindu tradition for buying precious metals, will be celebrated on Saturday, followed by Diwali on Monday.
Traders said buying activity picked up sharply as stockists built fresh positions on expectations of higher sales during the festive season. In addition to seasonal demand, safe-haven buying by investors and central banks has lent further support to prices.
“Gold extended its winning streak with strong gains as the ongoing US government shutdown and a dollar index below 99 continued to support safe-haven flows into bullion,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.
“The sustained uncertainty in the US economy and delayed data releases have kept investors inclined toward gold as a defensive asset. With momentum staying firmly bullish, gold is likely to remain elevated as long as risk sentiment stays weak,” he added.
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However, silver prices moved in the opposite direction. The white metal tumbled by ₹7,000 to ₹1,77,000 per kilogram (inclusive of all taxes), slipping from the previous close of ₹1,84,000 per kg on Thursday.
In the global markets, spot gold eased by 22.39, or 0.52 per cent, to USD 4,303.73 per ounce on Friday, after surging to a record high of USD 4,379.29 per ounce in the previous session.
Spot silver, which briefly hit a lifetime high of USD 54.48 per ounce, later declined 1.32 per cent to USD 53.43 per ounce.
Darshan Desai, Chief Executive Officer of Aspect Bullion & Refinery, said, “Looking ahead, geopolitical tensions, particularly US-China trade issues and credit market worries, will remain key factors to watch, especially after the recent sharp rise in gold prices.”
Analysts said the slight correction in global prices was likely a short-term adjustment following the recent sharp rally. “Despite the dip, the overall sentiment for gold remains constructive, driven by expectations of monetary easing by the US Federal Reserve, geopolitical uncertainties, and central bank buying,” they added.
According to the commodities market experts, the prolonged US-China trade standoff remain a key driver behind the precious metal's surge as trade tensions continue to cast a shadow over global growth prospects.
“The rally drew additional fuel after United States (US) regional banking stress headlines grabbed investors' attention and stoked risk aversion, with the ongoing US government shutdown further dampening market sentiment,” an expert said.
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