NEW DELHI: With the recent selloff in global stocks prompting investors to seek refuge in
safe havens
like gold, prices of the precious metal rose to a nearly six-year high in the domestic market and a three-month high internationally. Gold traded at Rs 32,625 per 10gm on Thursday in the national capital — the highest in nearly six years — on the back of festive and wedding season demand amid firm global trends and a weakening
rupee
.
This is the highest level since November 29, 2012 when the yellow metal traded at Rs 32,940 per 10gm. In Mumbai, gold traded at Rs 32,300 per 10gm on Thursday, having increased 4.7% — or Rs 1,450 — since the beginning of September.
Globally, gold was trading at $1234 an ounce in
Singapore
on Thursday. “Every time there is volatility, people look at gold as a store of value,” said Colin Shah, vice-chairman, Gem and Jewellery Export Promotion Council (GJEPC).
“There has been a riskaversion towards asset classes like equities,” said
Lakshmi Iyer, head (products) and chief investment officer (fixed income) at Kotak Mahindra Mutual Fund. “Risk asset classes like equities have given negative returns globally. The rupee depreciation has also added some value to the yellow metal,” she said.
Sentiments also got a boost on a firming trend in overseas where gold traded at an over three-month high as the dollar eased and equities slumped. A pickup in buying by local jewellers to meet seasonal demand and diversion of funds from falling equity markets also supported the uptrend.
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M Allirajan writes for the business section of The Times of India...
Read MoreM Allirajan writes for the business section of The Times of India. He has been tracking mutual funds and markets for nearly four years. Having worked in a business newspaper and a business magazine tracking the emerging trends in business and developments in corporate India, he believes in giving straight, simple and reader friendly content. When not following markets and developments in the mutual funds space, he reads books and listens to music.
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