Gold futures rose sharply in the domestic market on Tuesday as a weaker rupee exerted upward pressure on domestic bullion prices, which are denominated in US dollars. The rupee slipped past the 65 level against the US dollar on strong demand from banks and importers.
Rising geopolitical concerns amid deepening unrest in Syria where the government allegedly used chemical weapons against innocent civilians boosted the safe haven demand for the precious metal. US government warned that it will hold the Syrian government accountable for the slaughter of civilians, fanning concerns over military intervention by the West in the crisis-hit country.
The biggest slump in US durable goods orders last month since August 2012 raised speculation that the US Federal Reserve may delay the tapering of its QE program to support the US economy, bolstering the outlook for the precious metal, which is a hedge against the inflationary risk of monetary stimulus.
Gold futures for October 2013 contract, at MCX, were trading at Rs. 32,332 per 10 grams, up by 1.43 per cent after opening at Rs. 31,974 against the previous closing price of Rs. 31,876. It touched an intra-day high of Rs 32,426. (At 10:38 AM).
Dion Global Solutions Ltd.