There has once again been a strong rise in the prices of gold and silver in the Indian bullion market. The prices of both precious metals have reached the highest level in several months in the major markets of the country including the national capital Delhi. Due to the weakness in the US dollar and increasing uncertainty in the global market, investors have once again turned their attention towards gold, which is considered a safe investment.
According to news agency PTI, 24 carat gold of 99.9 percent purity increased by Rs 1,200 to Rs 1,63,500 per 10 grams in the spot market of Delhi. In the previous trading session, the price of gold was recorded at Rs 1,62,300 per 10 grams. According to bullion traders, this rise in gold is the highest level in almost three months, where earlier it was seen in mid-May.
Huge jump in silver prices
Along with gold, there has also been a tremendous rise in the prices of silver. On Friday, silver rose by Rs 5,000 to Rs 2,50,000 per kg (including all taxes). A day before this, on Thursday also, the price of silver had increased by Rs 10,000 and it closed at Rs 2,45,000 per kg.
That means, within just two trading sessions, silver has become costlier by Rs 15,000 per kg. This current price of silver is at its highest level in almost 15 weeks, before which it was at the level of Rs 2,49,500 per kg in the beginning of May.
Why are the prices of gold and silver increasing?
Many major reasons are being held responsible for this stormy rise in precious metals in the international market:
- Weak US Dollar: Gold is gaining strength globally due to the weakness in the US dollar index.
- US-Iran tension: Rising geopolitical tensions between the US and Iran have increased uncertainty in the global market, causing investors to shift money from risk assets to gold.
- Fall in bond yields: The fall in US bond yields has also provided strong support to both gold and silver.
According to Gaurav Garg, head of research at Lemon Markets Desk, the rise in gold continues for the third consecutive week. Silver has also been greatly supported by the weak dollar and fall in long-term US bond yields.
Record rise in international market also
Even in the global market, the movement of gold and silver remains quite aggressive. In the international market, spot gold jumped by nearly 2 percent to reach $ 4,600.91 an ounce, while silver rose by nearly 3 percent to touch the level of $ 69.87 an ounce.
Saumil Gandhi, senior commodity analyst at HDFC Securities, said that the spot gold price reaching close to $ 4,600 an ounce is the highest level in the last three months. Strong investment demand as well as increased volatility in currency and bond markets have pushed precious metals prices to new highs.