Gold prices in India rose sharply today tracking an uptick in global rates after US Federal Reserve launched unlimited quantitative easing. On MCX, gold futures were up 1.5% or about ₹600 per 10 gram to ₹41,780, extending their ₹700 gain of the previous session. Silver futures on MCX rebounded 5% or about ₹2,000 per kg to ₹39,861 per kg, extending their 6% gain of the previous session. Gold prices in India have seen a big swing this month, hitting a record high of about ₹45,000 per 10 gram and thereafter correcting to about ₹39,500 levels.
In global markets, gold prices moved higher today after a big jump in the previous session after the US Federal Reserve ramped up stimulus to support the economy reeling from the coronavirus pandemic. Spot gold climbed 2% to $1,583.53 per ounce after rising 4% in the previous session. Among other precious metals, platinum rose 4.5% to $671.11 and silver jumped 5.4% to $13.97 per ounce.
In a major announcement, the US central said on Monday that it would buy unlimited amounts of Treasury bonds and mortgage-backed securities and also set up programs to ensure credit flows to companies, even as the US fiscal rescue package remains stalled in Senate.
The impact of coronavirus raises concerns of a global recession and the stimulus measures should be should be bullish for gold, Bonanza Portfolio said in a note.
The recent price correction in gold also helped in stimulating investment demand in the precious metal. Holdings of SPDR Gold Trust, the world's largest gold-backed change-traded fund, rose 1.8% to 923.99 tonnes on Monday.
Veteran emerging-market investor Mark Mobius remains bullish on gold, saying that its recent sell-off presents a good time to increase holdings in the precious metal.
Gold prices had surged above $1,700 per ounce in global markets earlier this month but the flight to cash amid severe selloff in different asset classes had led to a big correction in the precious metal too.
Many central banks have announced various measures to mitigate the damage of the coronavirus outbreak, with Australia's central bank proposing to buy $2.35 billion in government bonds, while Germany agreed for a package worth up to $808 billion.
Oil rallied for a second day after the Federal Reserve unveiled a sweeping set of measures to support the world’s largest economy. Brent for May delivery rose 4.5% to $28.24 a barrel on the ICE Futures Europe exchange.
Meanwhile spot gold markets in many parts of the country remains shut due to lockdown in major states to prevent spread of coronavirus, according to HDFC Securities.
As the virus cases climbed, the central and state governments in the country decided to lock down 75 districts to break the chain of transmission. (With Agency Inputs)