After a two-day downtrend, gold prices in India edged marginally higher today, tracking similar movement in global markets. On MCX, June gold futures were up 0.28% to ₹45,911 per 10 gram while July silver futures rose 0.23% to ₹43,328 per kg. In global markets, gold prices were flat today after a two-day fall. Fears of a of a new wave of coronavirus infections in many countries as they reopened their economies supported gold despite a stronger US dollar.
Spot gold rates were unchanged at $1,695.75 per ounce. The US dollar was up at a more than two-week high against a basket of six other currencies, making gold costlier for investors holding other currencies.
Among other precious metals, silver fell 1.2% to $15.36, while platinum climbed 0.3% to $758.98.
"Gold prices may hold steady as its safe haven demand remains on the higher side due to fears of global recession and the chances of further economic easing measures from Central Banks. However, a strong U.S dollar and limited physical market activities cap major upsides in the commodity," said Hareesh V, Head Commodity Research at Geojit Financial Services.
Fresh spike in coronavirus cases in places that have eased lockdown-related restrictions such as China's Wuhan, South Korea and Germany have stoked fears of a second wave of infections. Wuhan, the epicentre of the outbreak in China, has reported its first cluster of virus infections since a lockdown on the city was lifted a month ago.
Jigar Trivedi, research analyst at Anand Rathi Shares, said: "South Korea warned of a second wave of the new coronavirus on Sunday, while new infections were accelerating again in Germany just days after its leaders loosened social restrictions. In the absence of any major economic release, focus will stay on covid-19."
Meanwhile, the holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell marginally to 1,081.07 tonnes on Monday.
The second tranche of sovereign gold bonds of this fiscal is open for subscription. The issue from government of India is priced at ₹4,590 per gram. Those applying online or making payment online will get a discount of ₹50.
"Expect investments to flow into gold as an investment class till clarity emerges on the current situation around the virus," Nish Bhatt, founder and CEO, Millwood Kane International, an investment consulting firm. (With Agency Inputs)