On Sunday, at the 1-hour Mahurat Trading, gold futures on MCX (Multi Commodity Exchange) closed 0.06 percent higher at Rs 38,293/10 grams.
On Monday, while Indian exchanges remained closed on account of Diwali Balipratipada, spot gold was trading at $1,5044 an ounce in the international markets, after a close to 1 percent jump in value in the previous session.
A likely increase in Gold prices in India could be expected as these rates are largely affected by trends in the global scene.
Here are 4 such factors that are likely to decide the movement in the yellow metal's prices this week:
1. Policy Rates
American policymakers are scheduled to meet on 29 and 30 October to decide on the US Federal Reserve's interest rates. Interest rates are expected to be cut for the third time this year.
Bank Of Japan's meeting will end on 31 October and analysts expect the country's central bank to keep the policy on hold.
A rate cut is good for the metal's prices.
2. Economic Data
On Monday, China reinforced concerns of a slowing economy with the release of economic data that showed the second-straight month of decline in profits of Chinese industrial companies. The long ongoing US-China trade war appears to have affected the corporate balance sheets despite signs of progress in negotiation talks at present.
US GDP data for the third quarter of the calendar year 2019 is also scheduled to be released this.
Further, on Sunday, Hong Kong's Financial Secretary Paul Chan said that the figures of a preliminary estimate for GDP to be released this week will show two successive quarters of contraction - the technical definition of a recession. He also added that it is unlikely that the city will achieve annual economic growth this year amid the over five-months of anti-government protests that haven't shown signs of a stop.
3. US-China Dispute
The outcome of the negotiations between the two largest economies in the world will be out on 16 November. Of late, gold prices have slightly eased as talks between the countries showed signs of positive progress.
US Trade Representative's office on Friday said it is "close to finalizing" some parts of a trade agreement with China. The statement gave the US dollar some boost. The US dollar and the trade war has been affecting gold prices movement largely since 2018. The dollar's gains make gold less attractive for traders as it is non-interest yielding and for buyers of jewellery in non-dollar currencies.
The tit-for-tat tariff imposition by the two countries has stirred global recession fears, raising gold prices by 17 percent in 2019 alone, while the recent progress slightly eased the spike.
Any statements associated with the talks affect the movement in gold prices globally as uncertainties in the economic or political front make the metal a go-to choice for safe haven among investors.
Uncertainty over Brexit continues. On Friday, the European Union agreed to Britain's request for an extension in the deadline for Brexit which was set on 31 October 2019.
The new deadline to depart from the EU has been decided to be 31 January 2020 as per a tweet from the European Council president on Monday.
The 3-month extension is now expected to give Britain's divided parliament some time to decide on Prime Minister Boris Johnson's call for a snap election.
Britain had voted in a referendum to quit the EU over three years ago but the country's parliament has remained divided over how, when and even whether to leave triggering a spiralling political crisis in the UK.