The price of gold rose by Rs 400 to Rs 1.50 lakh per 10 grams in Delhi’s bullion market on Monday. Precious metal prices were supported by increased festive demand and strong trend in global markets ahead of Dussehra. According to local traders, gold of 99.9 per cent purity was priced at Rs 10 per gram on Friday. 1,49,900 to Rs. 1,50,300 per 10 grams (inclusive of all taxes). However, for the second trading session in a row, silver prices rose by Rs. 2.15 lakh per kg remained stable.

Why did gold prices rise?

Saumil Gandhi, Senior Commodity Analyst, HDFC Securities, said gold prices rose in the domestic market on Monday, supported by the start of the festive season and improvement in retail demand along with a positive trend in overseas markets. He said demand for spot gold has improved. Last week, gold appeared to be trading at a premium for the first time in three months, as falling prices spurred jewelery buying. He said retail demand is expected to strengthen ahead of Diwali, India’s biggest festival, which will support the domestic market. Bullion markets will be closed on Tuesday on the occasion of Dussehra.

Can prices rise further?

Vikas Gupta, Chief Executive Officer (CEO) of OmniScience Capital said that gold prices generally rise during the festive and wedding seasons. However, the possibility of the US Federal Reserve raising interest rates could put pressure on global prices. Gupta said domestic gold prices are likely to rise slightly during the festive season, but prices may remain stable thereafter. On the global market, spot gold was trading little changed at $4,175.57 an ounce, while silver rose more than one percent to $57.63 an ounce. Gaurav Garg, head of research at brokerage platform Lemmon, said gold and silver prices were rising due to softening crude oil prices and falling yields on US bonds, easing inflation concerns and providing support to precious metals.