Gold makes a new high of Rs 78,300 on safe-haven, festive demand

Kolkata: Gold touched a new high of ₹78,300 per 10 gm on Wednesday due to safe-haven buying amid escalating tensions in the Middle East, and lower US bond yields. Market participants are expecting the yellow metal to rise further if global geopolitical uncertainties worsen. Prices rose by ₹1,500 per 10 gm compared to Tuesday.

Kumar Jain, spokesperson of the India Bullion & Jewellers Association (IBJA) said, “Zaveri Bazaar is buzzing with activity as there is a surge in gold prices. The footfalls have increased by up to 20% on Wednesday compared to a week ago.”

He said the Navratri festival, which will start on Thursday and continue till October 12, is an auspicious time for buying gold. “As there is a possibility of prices further moving northwards, consumers are visiting stores to pre-book gold and take delivery during Navratri,” he said.

Consumers are mainly buying gold jewellery for the upcoming wedding season that starts in November and will continue till February-March.

Thriving demand is leading karigars or goldsmiths to work for 12 hours every day instead of their normal work hours of eight.

“It is the China moment for India. China had been buying gold to hedge against inflation. Now Indians too have turned to the yellow metal,” said Jain.”Previously, we would suggest that 15% of one’s investment should go to gold. But, now since gold prices have started to give 18-20% return annually, the investment should go up to 25%,” said Bhargav Vaidya, a gold trade analyst.”The key drivers behind the stellar performance of gold is the beginning of a rate cut cycle in the US, followed by strong anticipation for further rate cuts in upcoming US Fed meetings, said Colin Shah, MD, Kama Jewelry.