India, New Delhi: The gold rate today of 99.9 percent and 99.5 percent pure gold have risen by Rs. 175 each to Rs. 32,275 and Rs. 32,125 for every 10 grams, respectively. This new surge is backed up by rising demands globally and increased interest by local jewelers in India. The prices for silver also increased from Rs. 200 to Rs. 38,000 per kilograms because of increased production by coin makers and industrial units.
Positive cues globally combined with the risk averse attitude of investors due to a US government shut down has created economic turbulence that has shaken markets across the globe. As has always been traditionally the case with the bullion market, gold serves as a hedge against harsh times.
Also helping the case of gold is increased buying by local jewelers on a domestic level who hope to cash in on the fragile market. Sovereign retained its position by trading at a flat Rs. 25,000 per eight grams a piece.
Monday saw the global prices in gold increasing, firmly sustaining a near six month high that was seen last week. This comes at a time when investors are facing increased paranoia about global economic disruption and political uncertainty in the wake of a partial US Federal Government shutdown.
All this political turmoil has allowed the bullion to close above the 200 day simple moving average (SMA) for the very first time since May. According to an IG Client Sentiment Report, the number of still net long gold went up 0.2 percent to 78.6 percent from 78.3 percent last week. The ratio of long to short traders is at 3.64 to 1.
The number of net long traders went up by 2.7 percent while the number of net short trader is 8.7 percent higher since last week. The outlook for gold in the near term remains positive as the precious metal market continues its upward climb since August.
Other precious metals strongly following suit are palladium and silver, with the former surpassing gold for a brief period this month. Palladium will increase in demand as more automobile manufacturers look to use it for their catalytic engines to reduce emissions of toxic gases into the atmosphere amid government crackdown.
Among other uses for palladium include jewellery and, crowns and dental fillings and groundwater treatment. The growing demand for palladium isn’t being met because of a global shortage of market supply.