Gold prices edged lower in India today, trading in a narrow range amid mix global cues. On MCX, August futures slipped 0.3% to ₹49,008 per 10 gram, following a 0.24% fall in the previous session. Gold prices in India have remained rangebound since hitting a record high of ₹49,348 per 10 gram last week. Silver futures also edged lower on MCX to ₹53,005 per kg.
In global markets, gold rates moved higher as concerns over surging coronavirus cases around the around and simmering US-China tensions held up the safe-haven appeal of gold. Spot gold rose 0.2% to $1,811.41 per ounce while US gold futures settled mostly unchanged at $1,813.80. A weaker dollar, which fell 0.2% versus rivals, also helped support gold.
However, promising early data for a potential COVID-19 vaccine capped gold's rise. Among other precious metals, platinum rose 0.5% to $830.50 per ounce while silver gained 0.7% to $19.34.
Reflecting the investing demand for gold amid times of uncertainty, holdings of the SPDR Gold Trust exchange-traded fund, the world's biggest gold ETF, were near their highest level since April 2013.
"Gold may edge higher on simmering US-China tensions and surging new virus cases across the globe continue to lift its safe haven demand. A weak US dollar also offered lower level support to the yellow metal. Meanwhile, worries over higher level profit booking and optimism over COVID-19 vaccines are likely to limit major gains," said Hareesh V, Head Commodity Research at Geojit Financial Services.
"As long as prices (London spot) stay above $1770 bullish sentiments are likely to continue with resistance is seen at $1830 followed by $1882 levels. The immediate downside reversal point is $1735," he added.
So far this year gold prices are up 19% in international markets, benefiting from lower interest rates, coronavirus crisis and US-China tensions. Gold is viewed as a hedge against inflation and currency debasement.
Meanwhile, US-China tensions continued to simmer. The Hong Kong Autonomy Act, which US President Donald Trump signed on Tuesday, allows him to impose sanctions and visa restrictions on Chinese officials and financial institutions involved in the imposition of China's new national security law in Hong Kong.
Many analysts remain bullish on gold despite its strong rise this year, citing lower real interest rates, massive fiscal stimulus and a weak economy. (With Agency Inputs)