Chennai: Gold prices have risen to their highest level here by touching the Rs 40,000 mark for 10 grams.
“A slowdown in the global economy and escalating US-China trade tensions have pushed up the price of gold,” said a showroom owner.
“The government has also increased the import duty to 12.5 percent which stood at 10 percent earlier. This has also contributed to the surge in prices.”
Merchants are not buying gold as international prices are not stable. The demand has reduced. Only families celebrating weddings are opting to buy the precious metal, said the trader.
Gold prices scaled fresh highs as the on-going trade war between the United States and China battered global equities and boosted demand for safe-haven assets.
Gold is considered as a financial instrument that does not erode in valuation during periods of economic turbulence.
India is one of the largest consumers of gold and bought 760.4 tonnes in 2018, according to data compiled by the World Gold Council.