Even as gold prices in global markets surged today and held close to near 2-month peak levels, gold prices in the domestic market declined for the first time in four days following profit booking at higher levels. On MCX, gold February futures inched lower by 0.22% or Rs. 87 and quoted at Rs. 38,993 per 10gm. Silver futures in line also traded with loss of 0.37% or Rs. 175 at Rs. 46,791 per kg on the MCX.
Globally, gold prices have advanced today in year-end thin trade as economic and geopolitical concerns have yet again boosted the appeal of gold as a safe haven. As per a Reuters report, on Sunday the US military carried out air strikes in the Middle East, thereby causing geopolitical unrest and market uncertainty. During times of geopolitical and economic instability, gold is deemed as a safe haven investment.
Also, gold is supported from a slide in dollar against a basket of other currencies, which renders the yellow-metal cheaper for buyers in other currencies. Spot gold surged as much as 0.3% to $1515.80 per ounce.
On the back of 17-months long US-China trade war that impacted global economic growth, international gold prices climbed approximately 18% in 2019. In the domestic market, gold prices that comprise 3% GST and 12.5% import duty have increased 23% so far this year.
Though there has been made progress in the US-China trade tariff controversy with the agreement on 'Phase one' deal, investors are cautious as details on the agreement are not disclosed even as the US said that deal will be inked in early January. Plus anext year, the situation will get yet more complex due to the US presidential elections.