Gold prices, which had sunk below Rs 51,000 per 10 gram, bounced once again on Monday tracking positive trend in global rates. Silver prices also edged higher in Indian markets.
October gold futures rose 0.1% to Rs 51,504 per 10 gram on the Multi Commodity Exchange (MCX) to extend gains to the second day. Gold prices in India had hit a record high of Rs 56,200 on August 7 and they have been volatile since then following global rates.
September silver futures on MCX rose 0.4% to Rs 69,135 per kg. In the previous session gold had surged Rs 500 per 10 gram while silver had gained about Rs 1,000 per kg.
“Domestic prices were higher in Monday afternoon trade tracking weakness in the domestic unit and safe-haven appeal for the metals,” Sriram Iyer, senior research analyst with Reliance Securities, was quoted as saying by news agency PTI.
Despite the rise in both precious metals abroad, gold and silver remained soft last week. October gold futures on MCX fell by Rs 567 or 1.09%, to Rs 51,448 per 10 grams at the close of the market on the weekend.
September gold mini futures also fell by 1.91% to Rs 51,050 per 10 grams. September futures of silver fell by Rs 1,091 or 1.63%, to Rs 65,976 per kg. November silver mini futures were also down by 1.05% to Rs 68,836 per kg on the weekend.
Globally, gold prices hit a two-week high on Monday, supported by a weak US dollar. Spot gold was up 0.4% at $1,971.68 per ounce, after hitting $1,976 in early trade – its highest since August 19. US gold futures rose 0.4% to $1,982.50. The dollar index fell 0.2% and was on track for its fourth consecutive monthly decline.
Among other precious metals, silver jumped 1.7% to $27.94 per ounce while platinum rose 0.4% to $935.06.
Gold was also supported by the US Federal Reserve’s new policy framework which suggested that interest rates would remain low for some time, say analysts. Fed chairperson Jerome Powell had said last week that the central bank would adopt an average inflation target, meaning rates are likely to stay low for longer.
Lower interest rates weigh on the dollar and also decrease the opportunity cost of decrease the opportunity cost of holding non-yielding gold. Similarly, a weak US dollar makes gold cheaper for investors holding other currencies.
Gold prices are up about 30% so far this year in global markets as investors bet that governments and central banks policies would stay super stimulatory for a longer period as cases of the coronavirus disease (Covid-19) mounted to over 25 million and death stood at 846,985 across the world.
The rupee pared its early gains and settled 21 paise lower at 73.60 (provisional) against the US dollar on Monday, tracking muted domestic equities and a rebound in the American currency. The 30-share BSE benchmark Sensex closed 839.02 pts lower at 38,628.29.
(With agency Inputs)
Source: Read Full Article