The new year began with the gold rate in India holding at Rs.39,200 per 10 grams on 1 January 2020 as prices surged by Rs.250 per 10 grams on account of the positive market trends that led to strong investor demand.
The weakened US dollar coupled with market speculations over the US-Sino trade dispute led to gold prices hovering near three-month highs, registering their best year since 2010.
With the US-China trade relations showing weak signs of progress, the US greenback remained on the back foot against other apex currencies.
Strong safe-haven demand coupled with positive overseas trends led to gold price in India holding at Rs.39,200 per 10 grams on 2 January 2020.
Also, with investors and market participants focused on the minutes of the US Federal Reserve’s monetary policy meeting, gold was on the path towards its three-month high it had attained earlier during the week.
With investors concerned about the rallying stock markets despite the prevailing political and economic conditions, demand for safe-haven assets such as the bullion surged.
Also Read: It’s Wise to Keep Gold Receipts Safely; It Can Help Your Taxes Later
Safe-haven demand spiked the next day as tensions intensified after an airstrike by the United States resulted in the death of the Iranian Major-General.
With the political environment in the Middle East playing a significant role in the markets, gold rates in India rose by Rs.500 to Rs.39,700 per 10 grams on 3 January 2020.
With investors flocking on the bullion after the airstrike in Baghdad that was authorised by the US President, gold prices continued to inch higher in the commodity market.
Gold in India was recorded trading at Rs.40,000 per 10 grams on 4 January 2020 as the bullion jumped to near seven-year highs amid the US-Iran tensions.
Strong safe-haven demand brought about by the intensifying tensions in the Middle East led to gold prices in India remaining untouched for the remainder of the week.
When trading concluded for the week, gold was recorded holding steady at Rs.40,000 per 10 grams on 5 January 2020. India also registered an increase of 2.04% in gold rates during the week.
For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in
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