New Delhi: Gold saw a sharp surge in
demand as a safe haven asset which pushed the precious metal to an
all-time high of Rs 37,347 per 10 grams on Monday amid growing trade
tensions between US and China.
Besides, the uncertainty caused
due to the scraping of the Constitution's Article 370, thereby, revoking
the special status given to Jammu and Kashmir also caused people to
flock to safer bets.
Gold prices surged by over Rs 830 or 2 per
cent on the Multi Commodity Exchange(MCX) after the US last week
announced fresh tariffs on Chinese products. Later, China vowed that it
will respond to this US move, which sent the yuan plunging.
At the MCX, October contract of gold was trading at Rs 37,070 per 10 grams before it hit an all-time high of Rs 37,347.
prices also got a boost due to the depreciation in rupee, making
imports more expensive. The rupee closed at Rs 70.73 to a US dollar,
weaker by Rs 1.13 from its Friday's close of Rs 69.60.
global trade turmoil between US-China and political imbalance in Kashmir
led USD/INR spot open at 11-week high. Trade tensions were revoked
after China retaliated to counter the tariff threat," said Rahul Gupta,
Currency Research Head, Emkay Global Financial Services Ltd.
"This led Chinese yuan drop to a 11-year low of 7.04, putting pressure on emerging market currencies including rupee," he added.
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