Gold prices hit new highs this week in India, closing with strong gains. On MCX, October gold futures settled 1.2% higher at ₹53425 per 10 gram on Friday. During the session, gold hit a new high of ₹53,700. And during the week it rose about ₹2,500 per 10 gram or about 4.6%. Silver futures also finished the week on a strong note on Friday, rising 3.6% or ₹2300 to ₹64970 per kg. Silver has been very volatile since hitting the multi-year of ₹67,560 last month.
In India, gold prices have jumped over 35% so far this year, tracking a global rally.
Worries over the global economic fallout from the mounting COVID-19 cases drove investors towards the safe-haven metal, says Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
Data showed the U.S. economy suffered its biggest blow since the Great Depression in the second quarter due to the pandemic, while investors also geared up for an uncertain political situation in the country.
Fueled by dollar weakness and low interest rates, in global markets, gold also finished a strong week. Both gold and silver are up 30% this year, with gold and silver exchange-traded funds boosting holdings to a record.
Earlier this week, the Federal Reserve this week repeated a vow to use all its tools to support the U.S. economy. Spot gold rose as high as $1,983.36 an ounce on Friday, a fresh record.
With more stimulus on the horizon, analysts remain bullish on gold. Goldman Sachs forecasts a rally to $2,300 while Bank of America Corp on Friday that prices could soar to as high as $3,000. However, JPMorgan Chase & Co. sees the rally losing steam later this year.
Back in India, the fifth tranche of gold bonds of this fiscal opens tomorrow and the issue price has been fixed at ₹5,334 per gram. Sovereign gold bonds are issued by RBI on behalf of the Government of India. Basically, gold bonds are government securities denominated in grams of gold. They are substitutes for holding physical gold.
(With Agency Inputs)