Ever since Prime Minister Narendra Modi government has unveiled the first Union Budget, it has driven the investors to safe-haven investments like gold and silver. It resulted into a surging gold price which hit a record high mark due to domestic and international factors, as per reports. A weakened equity market resulted in eroding the billions of rupees in investor wealth.
Finance Minister Nirmala Sitharaman introduced a tax surcharge on super-rich investors leading in the capital flight which kept out the foreign portfolio investors (FPI). Not just that the investors were also annoyed by the important specification that the companies need to set apart 35 per cent of equity for public holding against 25 per cent.
On Multi Commodity Exchange (MCX), October gold contract rose 0.44 per cent to Rs37,925 per 10 grams on Friday, as per a report. Gold prices had hit a new high at Rs 38,488, buoying another precious metal silver rising 0.8 per cent to Rs 43,417.
Investor eagerness for gold futures had not reflected on the spot market with gold price plunging by Rs 140., though it remained above the mark of Rs 38,000 mark at Rs 38,330 per 10 gram, as per reports of India Sarafa Association.
In New Delhi, gold of 99.9 per cent and 99.5 per cent purity witnessed a fall of Rs 140 to Rs 38,330 and Rs 38,160 per 10 gram, respectively.
In the international market, spot gold prices remained almost more than six-year peak, leading to rise more than 0.3 per cent to $1,505.20 an ounce as investors’ appetite for the safety of the metal amidst US-China trade tensions.
Gold prices sweeped up as investors scrambled to find safe-havens. What grabbed more attention was tailspin of Global equity and currency markets after China’s perceived currency devaluation.