Gold futures surged yesterday after risk aversion was witnessed in financial markets which tends to support bullion prices.

Despite of correction taking place in industrial metals silver prices moved up sharply following sharp upmove in Gold prices.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust said holdings stood at 1,061.83 tonnes as of Sept 1, unchanged from the previous business day.

Futures rose in spite of news that global gold jewelry demand fell sharply due to higher price of gold and a recession. India's gold imports in August provisionally slumped to between 12 to 14 tonnes from 98 tonnes in the same month last year as high prices and weak monsoon rains dented demand.

Gold and gold receivables held by euro zone central banks rose by 2 million euros to 232.111 billion euros in the week ending August 28, the European Central Bank said on Tuesday. Net foreign exchange reserves in the Euro system of central banks rose by 0.5 billion euros to 194.6 billion euros ($279.4 billion), the ECB said in its regular weekly consolidated financial statement.

Gold has justified to its characteristic, yesterday there were concerns in U. S. about the banking sector may face problems and most of the banking stocks were sharply down, resulted in bargain buying in Gold despite of weak retail and investment demand

We have seen despite of stronger dollar and drop in oil prices bullion’s moved up, it seems that after good rally in financial market some risk aversion is seen in near term after Chinese markets crashed by more than 25% in last fifteen days and U. S., Europe and rest of the world was also down. In today’s trading session we expect prices to sideways to up and weaker INR might also support the prices.