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Gold prices in India continued to trade in a narrow range as investors assess the impact of the pandemic and the pace of vaccine distribution. They are also keeping a watch on progress of an enhanced stimulus package in the US Senate. On MCX, February futures were down 31 to 50,008 per 10 gram while silver futures jumped 1% to 68,847. In the previous session, gold had ended flat, settling 22 higher per 10 gram while silver had declined 800 per kg. Gold futures on MCX have remained in the 50,500 to 50,000 for the past two weeks.

In global markets, gold rates today rose 0.2% to $1,881 an ounce, supported by a slide in US dollar against its peers. The US dollar hovered at over two-year low against rival currencies.

Gold has also gained support from virus concerns as more countries reported cases of new variant of coronavirus, forcing them to impose stricter measures. The US has reported the first case of the new Covid-19 variant which was discovered in the UK.

However, progress on covid-19 vaccination front also reduced gold’s safe haven appeal, say analysts.

In the US, Senate Majority Leader Mitch McConnell blocked an effort to approve the direct payments by unanimous consent, but said the chamber would address the increased stimulus checks this week. The upcoming US Senate runoff elections in Georgia will determine which party controls the Senate.

Gold has strongly benefited from massive stimulus rolled out this year to combat the economic impact of covid. In India, though gold is down significantly from its August highs of 56,200 per 10 gram, it is still up over 25% so far this year, tracking a global rally and a nearly 3% year-to-date depreciation in the rupee's value against US dollar. Gold is seen as a hedge against inflation and currency debasement.

"Gold may witness choppy trade amid mixed factors but a clear up move may come only if there are fresh positive triggers or if price manages to close above the key $1900/ounce level," Kotak Securities said in a recent note.

In India, the latest issue of sovereign gold bond is up for subscription with issue price at 5,000 per gram of gold. Investors applying online and making the payment against the application through digital mode get a small discount. The issue will close on January 1, 2021.

Gold bonds are denominated in multiples of gram(s) of gold with a basic unit of 1 gram and its tenor is eight years with exit option after fifth year to be exercised on interest payment dates.

(With Agency Inputs)

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