Central bank buying, ETF demand push gold near ₹1,00,000

Gold prices have reached an all-time high, with investors turning to the precious metal as a safe investment amidst the ongoing trade tensions between the United States and China. Analysts believe the weakening US dollar and growing international trade uncertainties are the primary factors driving the surge in gold prices.

On Monday, the price of 10 grams of gold with 99.9 percent purity in the Delhi bullion market increased by ₹1,650 in a single day, closing at ₹99,800. With the addition of GST, the final price touched the ₹1,00,000 mark. Following the market holiday on Friday, gold began soaring as soon as trading resumed on Monday.

On the Multi Commodity Exchange (MCX), June gold futures contracts hit an all-time high of ₹96,875. So far this year, the price of gold has increased by over 26 percent, amounting to a rise of nearly ₹20,000.

The dollar index has declined by more than 10 percent over the past three months, dropping below the 99 mark. This, along with the ongoing US-China trade war and concerns over global economic growth, has led to increased demand for gold as a secure investment. In this backdrop of geopolitical and economic uncertainty, both investors and central banks of various countries are making significant gold purchases. In the international markets, the spot price of gold is trading near $3,400 per ounce.

The continued gold purchases by central banks and the rise in investments in Exchange Traded Funds (ETFs) are also contributing to the price increase. Experts estimate that domestic demand for gold is likely to rise further with the upcoming festive season. Meanwhile, silver prices also saw a rise on Monday, increasing by ₹500 per kilogram to reach ₹98,500.