Gold Surges To Fresh High, Triggering Rally In Jewellery Stocks
Gold, seen as a safe-haven asset, has logged a jump of over 25% in its rates this year.
International gold prices surged to fresh highs on Friday, triggering a rally in jewellery stocks in the domestic equity market. Spot gold peaked to $2,570.3 per ounce — a new record high — and the yellow metal's futures on the Comex rose as high as $2,599 an ounce.
On India's MCX, gold futures for December delivery were trading 0.63% higher at Rs 73,852 per 10 grammes at 2:58 p.m. The rates were inching close to the all-time high of Rs 74,094 clocked in July.
On Thursday, spot gold had climbed nearly 2% as the US dollar extended declines ahead of an expected rate cut by the US Federal Reserve next week. Prices also received a boost following the euro's increase against the dollar, as investors reduced their expectations for further rate cuts by the European Central Bank, which had lowered rates on Thursday.
Gold, seen as a safe-haven asset, has logged a jump of over 25% in its rates this year. The surge has been driven by an anticipation over the Fed's shift towards monetary easing.
Central bank purchases, coupled with strong demand for safe-haven assets amid ongoing conflicts in west Asia and Ukraine, have fuelled the metal's rise. Additionally, retail investor interest in gold has also contributed to the rise.
Gold stocks, such as PC Jeweller Ltd., Tribhovandas Bhimji Zaveri Ltd., Kalyan Jewellers India Ltd., Thangamayil Jewellery Ltd. and Motisons Jewellers Ltd., logged gains in the range of 3.5% to 20%.
The sharpest jump was logged by TBZ, which rallied 20% to hit a 52-week high of Rs 327.6 apiece on the NSE.
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Shares of gold loan issuers also rose on the bourses, with Manappuram Finance Ltd. advancing as much as 5.3% intraday to Rs 216.5 apiece and Muthoot Finance rising 4.6% intraday to an all-time high of Rs 2,078.75.
