Quarterly Gold Trend in India – How the Bullion Fared in Q3 2019

Q3 2019 witnessed the gold trade in India surging significantly with gold prices touching six-year peaks on account of the strong safe-haven demand brought about by various market cues overseas.

July 2019

The third quarter began with gold in India trading subpar under the Rs.35,000 per 10 grams mark as the bullion was weighed on by the gaining equity markets.

The rise in equities could be attributed to the market expectations of a truce between the US and Chinese counterparts and the release of a stronger-than-expected US employment data during the initial week.

The next couple of weeks saw investors transitioning from equities to safe-haven assets such as the bullion amid expectations of a dovish stance by the US Federal Reserve to slash its interest rates.

With the US dollar losing against a basket of major emerging currencies, demand for the metal surged, and gold prices in India scaled to two-week high figures during the month.

The rest of the month saw gold rates fluctuating considerably with various global cues such as the Middle East tensions and profit-locking driving investor demand for the metal.

Thanks to the strong market trends overseas that spurred domestic demand for the metal, gold prices in India rose by 2.36% during the course of the month.

August 2019

Trading commenced for the month with 24K gold rates hovering near two-week lows near the Rs.35,500-mark. The decline in prices can be attributed to the regaining US dollar index with market participants focussed on the US Federal Reserve bi-monthly monetary policy meeting.

However, with the US-Chinese trade dispute showing no signs of improvement, demand for the bullion surged with investors hedging on safe-haven assets against the market volatility.

Strong safe-haven demand brought by favourable market cues, especially the escalating US-Sino trade tensions led to gold prices in India hovering over the Rs.38,000-mark for the much of the month.

Despite the minor slumps in demand towards the end of the month, the bullion seemed to pick up on the back of investor sentiments amidst fears of a global economic recession.

Trading closed for the month soon after the precious metal scaled over the Rs.39,800-mark touching record six-year high figures globally.

Also Read: 24K Gold Rate in India for September 2019: Week 3

India registered an incline of 8.9% in gold rates, thanks to the strong investor demand brought about by positive market trends overseas.

September 2019

The month began with gold prices still hovering near the Rs.39,000 per 10 grams mark with steady and sustained demand from investors coupled with favourable market cues.

Though demand experienced a slump on account of positive developments around the Brexit issue, the US Fed rate cut bets and the European Central Bank meeting kept the bullion afloat.

Dented risk sentiments compounded by concerns over the declining economic growth resulted in the bullion hovering near its six-year highs for much of the month.

The bullion surged further mid-way after the drone attacks on Saudi oil facilities resulted in an increased safe-haven demand for the precious metal. The event alone led to gold prices rising by 1% globally.

With markets speculating over the uncertain US Federal Reserve’s monetary policy outlook, prices fluctuated considerably between the Rs.37,700 – Rs.38,200 range the next few days.

With trading, a few sessions away from concluding for the month, gold in India is expected to rise further, considering the decline in the US dollar value against amid other major currencies amid the economic growth woes.

For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in