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Gold Price In India Above Rs 38,000 On Weak Risk Appetite

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On Thursday, weighed by weaker economic data and risk-averse global sentiment, gold prices in India were above the Rs 38,000/per gram.

On MCX, gold futures were trading at Rs 38,130 per 10 grams, 0.99 percent higher than the previous day's close.

Imitating movement in the yellow metal, silver futures were trading 0.24 percent higher at Rs 44,641 per kilogram.

Gold Price In India Above Rs 38,000 On Weak Risk Appetite

 

Weak economic data

CPI data released on Wednesday showed that India's retail inflation had surged to its 16-month high of 4.62 percent for the month of October. However, core inflation fell to 3.44 percent, the lowest in the current inflation series, when compared to 4.02 percent last month.

Apart from core inflation, other economic data released this month have indicated slowing economic growth in India.

PMI (Purchasing Managers Index) showed weak manufacturing and service activity in October and September's IIP (Index of Industrial Production) data released this week displayed a contraction to 4.3 percent, the lowest in almost 8 years.

Further, on Tuesday, an SBI report said that GDP (gross domestic product) for Q2 may be at 4.2 percent, lower than the 6-year low of 5 percent growth seen in Q1.

International cues

Increase in international gold prices also aided domestic gains. Spot gold was up by 0.1 percent at $1,464.31 per ounce, while US gold futures rose 0.1 percent to $1,464.80 an ounce.

Asian stocks fell on Wednesday after China's industrial output data showed that growth in manufacturing activity in the world's second-largest economy was significantly slower than expected in October due to weakness in global and domestic demand and the drawn-out trade war with the US.

Further, an escalation in the Hong Kong riots this week, along with US President's comments on US-China trade deal made investors seek refuge in the safe-haven metal.

On Tuesday, American President Donald Trump threatened to "substantially" raise tariffs on China, if the ongoing talks of a trade deal between the two countries fail, crashing hopes of progress in their trade negotiations.

 

In the last month, the two countries had reached a truce and started working on finalizing a limited trade agreement. The high-stake agreement, which is expected to be signed later this month, appears to have hit roadblocks on disagreements between the trade partners over a number of issues.

While China is insisting on the withdrawal of existing tariffs as part of the deal, the US has shown opposition to the request.

Read more about: gold gold price silver silver price
Story first published: Thursday, November 14, 2019, 13:01 [IST]
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