Gold prices in India moved higher for the third day in a row, edging closer to record highs. On MCX, June gold futures rose 0.3% to about ₹46,800 per 10 gram. In the previous session, gold had surged about 1.4%, tracking strong global cues. Last month, gold prices had hit record high of ₹47,327 per 10 gram. Silver futures on MCX surged ₹615 to ₹44,750 per kg, extending their ₹1,090 gain of the previous session.
In global markets, gold prices edge higher amid expectations of more stimulus from governments and central banks. US-China tensions also boosted the safe-haven appeal of gold. US President Donald Trump is open to negotiations on another possible stimulus bill amid the pandemic, a White House spokeswoman said. Among other precious metals, platinum eased 0.1% to $767.29, while silver rose 0.7% to $15.97.
Spot gold gained 0.1% to a three-week high of $1,730.56 per ounce, extending the gains to about 2% for this week.
Gold tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement. "US Federal Reserve’s downbeat economic projection and hopes of further economic stimulus support gold’s safe haven demand. Concerns over the next wave of virus outbreak will also boost the safe-haven appeal of gold," said Hareesh V, head of commodity research at Geojit Financial Services.
Analysts says investors are rethinking their bets that the reopening of economies around the world will allow for a relatively quick resumption of growth. Another possible flare-up in tensions between the US and China is also hitting markets.
On Wednesday, Federal Reserve Chair Jerome Powell warned that coronavirus crisis could result in a prolonged downturn, while the top infections diseases expert in the US said reopening the economy too quickly could backfire and lead to more deaths.
The holdings of SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, rose 1.15% to 1,104.72 tonnes on Thursday.
The second tranche of sovereign gold bond scheme 2020-21, which opened for subscription on Monday, will close today. The issue price of the latest gold bond scheme has been fixed at 4,590 per gram (999 purity) and those applying online and making payment through digital mode will get a discount of ₹50 per gram. Sovereign gold bonds are issued by the Reserve Bank of India (RBI) on behalf of the government.
(With Agency Inputs)