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Gold prices jump ₹1,000 in 2 days in India, rise to near 3-month highs

Gold rates jumped to near ₹48,000 per 10 gram on MCX (PTI) — Gold rates jumped to near ₹48,000 per 10 gram on MCX **(PTI)**

1 min read . Updated: 06 Nov 2021, 11:34 AM IST Livemint

Dovish stance of central banks and festive buying demand supported gold rates

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Gold and silver continued their upward momentum this week in India, supported by dovish stance of central banks and festive buying demand. On MCX, gold futures jumped 0.82% to settle near three-month high of ₹48,000 per 10 gram on Friday while silver rose 0.33% to ₹64330 per kg. In fact, gold has surged about ₹1,000 per 10 gram over the past two sessions.

In global markets, gold rose more than 1% on Friday to a near two-month high as major central banks' dovish tone on interest rates this week supported the demand for the safe-haven metal. Spot gold was up 1.2% at $1,813 while silver rose 1.2% to $24.05 per ounce. This week, the central bank announcements helped gold reverse from early losses.

On Wednesday, the Federal Reserve after its two-day policy meeting stuck to its view that inflation would prove "transitory" and would likely not require a fast rise in interest rates. The next day the Bank of England surprised investors by keeping rates on hold.

Yields on the US 10-year treasury notes on Friday slipped to their lowest level in about a month. This came despite better-than-expected jobs data in US that pushed Wall Street to new highs.

The US economy added a better-than-expected 531,000 jobs last month as a wide range of industries took on workers, and the unemployment rate dropped to 4.6%, Labor Department data showed.

Near-zero interest rates to spur economic growth during the COVID-19 pandemic have propelled gold prices to new highs over the last two years, as easy monetary policy cuts the opportunity cost of holding non-yielding assets.

In India, physical gold demand in India picked up as buyers took advantage of a slight dip in prices and bought the precious metal during the festival season.

"Retail demand during Dhanteras and Diwali was 25% more than the pre-pandemic level of 2019," said Amit Modak, chief executive officer at jeweller PN Gadgil and Sons, told Reuters. (With Agency Inputs)

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