Gold prices soar amid budget rumours, weak rupee take it further at home

Nagpur: Gold reached an all-time high, touching Rs81,300 a tola (per 10 grams), amid international demand as a safe haven asset. Adding GST increases, the price goes up by another Rs2,500. Internationally, the gold rates are yet to touch the earlier peak of $2,790 per ounce. At home, however, a weak rupee and speculations over budget proposals have fuelled the prices, said traders.The global rates stand at $2,754 an ounce at present. A weaker rupee makes gold, which is an imported commodity, costlier in India. Moreover, traders are also charging a premium of as much as Rs300 to 400 a tola on the base rates. This is due to fears that the budget measures may make the yellow metal costly, said traders TOI talked to. Normally the premium is in the range of Rs50 to 100. However, these are pure rumours, and often there is volatility during the run-up to the budget, say jewellers.While gold is on a high, silver has failed to catch up. Silver, however, remained range-bound at Rs92,300 a kg, as against a peak of Rs1 lakh a kg without taxes achieved earlier. This is because of China markets taking a holiday break of a fortnight and also US President Donald Trump's announcements on imposing tariffs on Chinese imports.China is one of the biggest suppliers of metals, including silver, to US, said Nitin Khandelwal, a former director of the Gold and Jewellery Council (GJC). The gold-silver ratio is at 89, which is usually expected to be in the range of 80 to 85. Lower the ratio, higher silver prices are, he said.GJC chairman Rajesh Rokde, who is also a jeweller based in Nagpur, said much retail demand is expected due to the post-Makar Sankranti period, which is considered auspicious to buy gold. Rokde said budget fears have led to premiums going up, even as he clarified that these are purely rumours.Rajesh Thakker of M/s Dipti Jewellers also confirmed that the demand for silver, especially from the industries, remains subdued. Meanwhile, all eyes are on the Federal Open Market Committee (FOMC) meeting during which the Fed rates are decided. The gold prices usually move adversely proportional to the Fed rates.