Gold and silver prices in India continued to rise after posting strong gains in the previous session. On MCX, August gold futures rose 0.6% to a new high of ₹52,410 per 10 gram. Silver futures on MCX advanced 2% to ₹67,000 per kg. In the previous session, gold had surged 2.2%, crossing the ₹52,000 level for the first time. On the other hand, silver had jumped 7.5%.
In global markets, gold continued its record-breaking rally as investors bet that the US Federal Reserve will continue with its accommodative monetary policy. Fed policymakers meet later this week. Spot gold surged to $1,975 an ounce, rising $160 in just six sessions. Gold futures rose 2.3% to $2,000 an ounce. Silver rates surged 5% to reach $25.81, up almost 33% in seven sessions.
Gold prices have hit new highs due to U.S.-China tensions and a weaker dollar, while expectations of more stimulus to revive pandemic-hit economies lifted the metal's appeal as an inflation hedge, said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
Meanwhile, US lawmakers continued their efforts toward the country’s next fiscal stimulus as Senate Republicans raced to complete details of a $1 trillion coronavirus aid proposal.
Also supporting gold is a weaker dollar which has been fallen to a two-year low against a basket of currencies. Along with that uncertainty over COVID-19 and low interest rates have boosted the appeal of gold which is considered a safe-haven during economic uncertainty.
"ETF investors have continued to put money into the commodity amid increasing risks to global economy. Gold holdings with SPDR ETF rose by 1.75 tonnes to 1228.805 tonnes, highest since March 2013. While gold continues to rise, higher prices could further dampen consumer demand from countries like India and China. We may see extended gains unless there is a sharp rebound in US dollar," Kotak Securities said in a recent note.
Meanwhile in India, the government has extended deadline for mandatory hallmarking of gold jewellery and artefacts by over four months till June 1, 2021, in the wake of the ongoing COVID-19 pandemic.
(With Agency Inputs)