Concerns over the economic cost of coronavirus helped support gold prices
Gold prices in India are down ₹5,000 per 10 gram from this month's high
Gold and silver prices rose today in Indian markets after slumping in the previous session. On MCX, October gold futures were up 0.6% to ₹51,208 per 10 gram while silver futures rose 0.7% to ₹65,673 per kg. In the previous session, gold had slumped ₹900 per 10 gram while silver had crashed ₹2,500 per kg. Gold prices in India have been very volatile since hitting record highs of ₹56,200 on August 7.
In global markets, gold prices were steady after a sharp fall in the previous session. Spot gold was up 0.1% at $1,929.94 per ounce falling more than 1% in the previous session. Among other precious metals, silver eased 0.1% to $27.01 per ounce while platinum fell 0.7% to $922.07.
US Fed chief Jerome Powell on Thursday outlined a approach to setting US monetary policy that pushed up US bond yields. Higher bond yields increase the opportunity cost of holding gold which does not yield any interest income.
Signalling a more relaxed stance on inflation, Jerome Powell said that the Fed will seek inflation that averages 2% over time, a step that implies allowing for price gains to overshoot.
However, concerns over the economic cost of coronavirus helped support gold prices. The number of Americans filing new claims for unemployment benefits hovered around 1 million last week, suggesting the labour market recovery was stalling as the COVID-19 pandemic drags.
The stalemate over US next coronavirus relief legislation continued. US House of Representatives Speaker Nancy Pelosi said after talks with White House Chief of Staff Mark Meadows on Thursday that Democrats and Republicans remained far apart over how much to spend.
Back in India, the sixth tranche of sovereign gold bonds of this fiscal will open for subscription on August 31. The issue price of the bonds will be fixed in on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period.
Sovereign gold bonds are issued by Reserve Bank of India on behalf of the Government of India. (With Agency Inputs)