Gold and silver prices in India were firm today, hovering around record highs. On MCX, October gold futures prices were up 0.22% to Rs39,251 per 10 grams, after hitting a new high of Rs39,340 earlier this week. Silver futures on MCX rose 0.42% to Rs46,841 per kg, after hitting a life-time of Rs 46,925 in yesterday's session. A weaker rupee and a global rally in both gold and silver prices have lifted the precious metals to record highs in Indian markets.
In global markets, gold remained supported over $1,540 per ounce, near six-year highs of $1,556 set earlier in the week. Meanwhile, silver prices extended their recent gains, rising 0.85% to a near two-year high of $18.32 per ounce.
Global recession worries fueled by escalating US-China trade tensions and the specter of a no-deal Brexit have boosted the safe-haven appeal of gold this year, pushing the price of the yellow metal up nearly 20% so far this year. Along with that the turmoil in global financial markets - volatility in equity markets and currency markets and multi-year low bond yields have led investors to pile into gold ETFs.
Current gold-backed ETF holding of about 2,450 tons is about 1,000 tons higher than the post-financial crisis low of 1,425.1 tons, says a recent Bloomberg report.
"Comex gold trades in a narrow range near $1545 per ounce. Gold has turned choppy after failing to breach the 6-year high tested earlier this week. Mixed trade-in equity markets and US dollar has also led to choppiness in gold," Kotak Securities said in a note.
Gold is also supported by continuing investor inflows into gold-backed ETFs, it added.
Analysts also say that gold-buying by many central banks across the world have also supported the prices as the financial institutions seek to diversify their holding.
The second reading of Q2 US GDP is due today. If the GDP growth confirms the slowdown in economic activity, it could pressurize US dollar which will be supportive for commodities at large, including gold, Kotak said.
US Federal Reserve last month cut interest rates for the first time in about a decade and analysts expect the US central bank to lower rates again next month. Lower interest rates boost the appeal of non-interest yielding assets like gold.
Back in India, record high prices of gold have dented its demand and many jewellers have reported an increase in supply of old jewellery.