New Delhi, Aug 5 (IANS): Gold saw a sharp surge in demand as a safe haven asset which pushed the precious metal to an all-time high of Rs 37,347 per 10 grams on Monday amid growing trade tensions between US and China.
Besides, the uncertainty caused due to the scraping of the Constitution's Article 370, thereby, revoking the special status given to Jammu and Kashmir also caused people to flock to safer bets.
Gold prices surged by over Rs 830 or 2 per cent on the Multi Commodity Exchange(MCX) after the US last week announced fresh tariffs on Chinese products. Later, China vowed that it will respond to this US move, which sent the yuan plunging.
At the MCX, October contract of gold was trading at Rs 37,070 per 10 grams before it hit an all-time high of Rs 37,347.
Gold prices also got a boost due to the depreciation in rupee, making imports more expensive. The rupee closed at Rs 70.73 to a US dollar, weaker by Rs 1.13 from its Friday's close of Rs 69.60.
"The global trade turmoil between US-China and political imbalance in Kashmir led USD/INR spot open at 11-week high. Trade tensions were revoked after China retaliated to counter the tariff threat," said Rahul Gupta, Currency Research Head, Emkay Global Financial Services Ltd.
"This led Chinese yuan drop to a 11-year low of 7.04, putting pressure on emerging market currencies including rupee," he added.