Gold and silver prices rise due to increased festive demand, experts said this on future trends

Gold and silver prices went up on Thursday to fresh demand from stockists and retail consumers for the ongoing festive season. According to All India Sarafa Association, gold rose by Rs 200 to an all-time high of Rs 78,300 per 10 grams. It had closed at Rs 78,100 per 10 gram on Tuesday. Silver also surged Rs 665 to Rs 93,165 per kg on Thursday from its previous close of Rs 92,500 per kg. Besides, the gold of 99.5 percent purity rose Rs 200 to its all-time high of Rs 77,900 per troy. The metal had closed at Rs 77,700 per troy on Tuesday.

Commodity markets were closed on Wednesday on account of Mahatma Gandhi Jayanti. According to traders, sentiment has turned positive on improved demand at the beginning of 'Navaratri'. This week is considered auspicious in Hindu mythology to buy new things, especially precious metals.

Harish V, Head of Commodities at Geojit Financial Services said, "The possible increase in demand of jewelery amid of peak festive season and a weak Indian rupee also boosted commodity prices in the domestic market." The gold contract for December delivery on MCX fell by Rs 440 or 0.58 per cent to Rs 75,950 per 10 grams in futures trading. However, silver was trading higher by Rs 225 or 0.25 per cent at Rs 91,600 per kg on MCX.

During Asian trading hours, Comex gold was seen trading lower by 0.17 per cent at $2,665.20 per ounce. Saumil Gandhi, Senior Analyst, Commodities at HDFC Securities said, "Gold prices declined marginally on Thursday as the US dollar and treasury yields rose placing pressure on the precious metal." Globally, silver was quoted 0.36 per cent lower at $31.81 per ounce.

He said, "The mood of the bullion market remained gloomy on Thursday as the US stock market was seen trading in the red on Wednesday. Simultaneously, the tension has mounted high in West Asia. Israel has been gearing up for a response to the attacks by Iran, which hints that at the lower levels, the prices of precious metals may get support.

As stated by the AVP of Commodities and Currencies at Anand Rathi Shares and Stock Brokers, Manish Sharma, "Investors will keep an eye on the US employment data, including unemployment claims, to be released on Thursday, which may give some direction to the prices of the yellow metal." Positive market sentiment followed China's strong stimulus announcement. In the medium run, the outlook for silver is good compared to gold.