Gold prices continued to remain choppy in Indian markets, mirroring a similar trend in overseas markets. On MCX, June gold futures prices were up 0.28% to ?46,112 per 10 gram, extending their 0.8% gain of the previous session. Prior to Tuesday’s gain, gold prices had fallen over three consecutive sessions. Silver futures on MCX today rose 0.23% to ?43,063 per kg.
Concerns about second wave of coronavirus infections, weaker economic data and persisting US-China tensions have dampened risk sentiment. While countries across the globe continued with efforts to ease virus related restrictions, new coronavirus outbreaks in China and South Korea have revived concerns of a second wave of infections, boosting the safe-haven appeal of gold. Year-on-year, gold prices are up over 40% in India.
In global markets, gold prices moved higher today on expectations of more stimulus from central banks and concerns over second wave of coronavirus infections. Spot gold climbed 0.1% to $1,716.66 per ounce. US Federal Reserve chairman Jerome Powell on Wednesday warned of a “significantly worse” US recession than any downturn since World War Two and said that the US central bank will take more actions if needed.
Gold tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement.
Among other precious metals, platinum today gained 0.2% to $758.35, while silver fell 0.6% to $15.55.
“Gold has once again rebounded after a drop below $1700/oz and continues to remain choppy within the broad $1680-1750/oz range seen for last few days. We may see choppy trade as market players assess virus related and US-China situation however general bias may be on the upside,” Kotak Securities said.
“The US dollar index turned choppy amid disappointing economic data, doubts about continuing easing of virus related restrictions and increased discussion about negative interest rate,” the brokerage added.
Investor appetite for gold has continued to remain strong. The holdings of SPDR Gold Trust holdings, the world’s largest gold-backed exchange-traded fund, rose 0.78% to 1,092.14 tonnes on Wednesday.
The second tranche of gold bonds of this fiscal year (2020-21) is open for subscription today at a time when the investment demand for the precious metal is rising. Series II of sovereign gold bond scheme 2020-21 will close for subscription on May 15.
(With Agency Inputs)
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