Gold breaches Rs 39,000-mark second time in 10 days

AHMEDABAD: Gold prices breached the Rs 39,000-mark again on Tuesday, the second time in less than ten days. Rallying on geopolitical uncertainty and depreciation of the rupee, the price of fine gold settled at Rs 39,000 per 10g.
The last time gold prices rallied past this mark was on August 13, when prices hit Rs 39,100. Analysts say gold prices are likely to rise further.
“Due to geopolitical factors, the international price of gold was $1,508 per ounce, while the rupee depreciated against the US dollar, settling at 71.7 on Tuesday.Thanks to this, gold prices rose past the Rs 39,000-mark. Owing to geopolitical uncertainty across several major economies, gold prices are expected to rally further and could hit Rs 40,000,” said Haresh Acharya, director of the India Bullion and Jewellers’ Association (IBJA).
High procurement costs are hurting demand for gold, jewellers say. “The constantly rising prices are a shock for consumers and demand is sluggish due to this. Only those in absolute need are making gold purchases, such as those who have a wedding scheduled. Some purchases are also taking place via the exchange of old gold,” said Harit Zaveri, a city-based jeweller.
Gold prices have risen by Rs 4,600 over the past month and a half. The price of fine gold was Rs 34,600 per 10g on July 1, and is now at Rs 39,000. Apart from geopolitical factors, the depreciating rupee and the hike in basic customs duty on gold to 12.5% have fuelled the spike in prices.