Gold prices today rise, cross ₹51,000 per 10 gram; silver jumps1 min read . Updated: 14 Nov 2020, 06:24 PM IST
- Analyst say that gold may see a choppy trade in near term
- A major sell-off in gold rates is unlikely as rising virus cases may further strengthen expectations for additional stimulus measures, they say
Gold and silver prices edged higher in Indian markets on Diwali. In the special one-hour Muhurat trading session on MCX, gold futures rose 0.25% to ₹51,050 per 10 gram while silver rates rose 0.32% to ₹63940 per kg.
Gold prices had ended ₹300 higher per 10 gram in the previous session while silver had risen ₹1,000 per kg. However, on a weekly basis, gold prices however had fallen about ₹1,200 per 10 gram on covid vaccine optimism after Pfizer reported positive interim results. Pfizer and BioNTech SE on Monday said their COVID-19 vaccine was more than 90% effective based on initial trial results.
But gold later pared losses as the week progressed, supported by rising coronavirus cases, mixed economic data from major economies, hopes of additional stimulus measures. Gold is considered a hedge against inflation and currency debasement likely to result from large stimulus. Gold also got some support from a weaker US dollar.
The US dollar index is struggling for direction as concerns about health of European economies is countered by concerns about US economy, say analysts.
On the other hand, gold ETF investors remain wary about impact of COVID-19 vaccine on gold prices, say analysts.
US Federal Reserve Chairman Jerome Powell has expressed concern about the surge in coronavirus cases and on Thursday repeated his view that more action from the Federal Reserve and Congress, in the form of further fiscal stimulus, will likely be needed.
"We may see choppy trade in gold continuing but a major sell-off is unlikely as rising virus cases may further strengthen expectations for additional stimulus measures," Kotak Securities said in a recent note.
"Gold has turned mixed also as support from rising virus risks, mixed economic data from major economies, hopes of additional stimulus measures is countered by weaker investor buying, progress on vaccine and concerns about US fiscal stimulus deal. Silver may witness choppy trade due to lack of fresh triggers however we expect gold to remain supported by stimulus expectations and this may support silver as well," the brokerage said. (With Agency Inputs)