MUMBAI, Aug. 26 (Xinhua) -- Gold and silver prices touched a new high on Monday morning in Mumbai as investors opted for safe haven on escalating global trade tensions and concerns over economic slowdown.
At 3:40 p.m. local time, spot gold prices on MCX platform were trading at 535 U.S. dollars per 10 grams after hitting a new high of 544.86 U.S. dollars earlier in the session. Silver too surged to a record high at 623.3 U.S. dollars per kg and was trading at the same level.
"Depreciating Indian rupee also helped the rise in prices. We expect the current trend to continue for gold and silver," said Pritam Kumar Patnaik from Head Commodities, Reliance Commodities, a domestic commodities brokerage house.
Rupee touched a low of 72.25 earlier in the day against the U.S. dollar but at 3:40 p.m., it recovered to 71.93 down 27 paise, or 0.37 percent, from Friday's close.
"Gold prices in India are holding in a vast range and undermining selling overseas due to a weakening rupee," said Abhishek Bansal, chairman of Abans Group, a stocking broking and financial conglomerate based in Mumbai.
Gold may trade in a volatile range for the short term due to weakness in the Indian rupee and mixed sentiments overseas, Bansal said.
The volatility in equity market on Monday morning also helped the surge in gold and silver prices as a safe haven despite the Indian government's announcement on Friday evening after market hours to roll-back the enhanced super-rich tax on foreign and domestic equity investors.
Friday's announcement also included addressing the distress in the auto sector as also upfront infusion of 9.73 billion U.S. dollars to public sector banks among few other sops, in an effort to revive economic growth from a five-year low.
Benchmark index - Sensex opened higher at 37,363.95 on Monday morning, up 662.79 points from Friday's close, but immediately dropped by 871.3 points in a volatile trade only to recover later during the day that in turn corrected the gold prices from their peak.
Sensex and Nifty closed at 37,494.12 and 11,057.85, up 2.16 percent and 2.11 percent respectively over its previous close on Friday.
