New Delhi, Aug 1 (PTI) Gold prices rallied Rs 550 to Rs 72,500 per 10 grams in the national capital on Thursday on higher domestic demand and positive global trends.
The yellow metal rose for the third day in a row, recovering from sharp losses due to the government's budget announcement of a customs duty cut on gold and silver.
In the previous trade, the precious metal had closed at Rs 71,950 per 10 grams.
Silver prices also jumped Rs 600 to Rs 86,200 per kg from Rs 85,600 per kg in the previous session, according to the All India Sarafa Association.
Meanwhile, gold of 99.5 per cent purity also bounced by Rs 550 to Rs 72,150 per 10 grams from the previous close of Rs 71,600 per 10 grams.
"The risk of a further escalation of geopolitical tensions in the Middle East pushes the safe-haven commodity to a...high during the Asian session on Thursday," Rahul Kalantri, Vice President of Mehta Equities Ltd, said.
Globally, Comex gold is trading higher at USD 2,490 per ounce, up by USD 17 per ounce from the previous close.
According to the market experts, the yellow metal prices rose further as the yields dipped after US Federal Reserve Chair Jerome Powell left the key interest rates unchanged on Wednesday and hinted towards the reduction in borrowing costs in September.
"...yields dipped once again when Powell, in his presser, mentioned that a September rate cut is on the table if the Fed gets the desired data," Praveen Singh – Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said.
In the international markets, Comex silver rose 0.65 per cent to USD 29.13 per ounce.
Further, the commodity market experts are predicting a further rise in the yellow metal prices fearing war escalation in the Middle East.
"Gold prices are steadily moving upwards amid rising expectation of a rate cut by the US Federal Reserve at their September meeting, and a jump in safe-haven demand due to escalation in the Middle East tensions," Pranav Mer, VP - Research (Commodity & Currency) BlinkX and JM Financial, said.
"....Iran's leader has ordered a direct strike on Israel, increasing the possibility of further escalation and boosting haven demand for gold," Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities, said.