Gold rates have edged up on concerns over rebound in covid vases while silver rates today edged higher after a big fall in the previous session
Gold edged higher today in Indian markets, pushing prices to near one-month high. On MCX, gold futures were up 0.38% to ₹48,278 per 10 gram while silver advanced 0.3% to ₹67,442 per kg. In the previous session, gold had edged up 0.12% while silver slumped over ₹1,000 per kg. In international markets, gold has rebounded this month to trade above $1,800 an ounce after a plunge in June amid fears over pace of monetary tightening by the US Fed. In India, gold had hit a record high of ₹56,200 in August last year.
In global markets, gold rates edged higher today as a rebound in covid cases across the world boosted the safe-haven appeal of the precious metal. Spot gold rose 0.3% to $1,818.25 an ounce. Gold was also supported by dip in US bond yields. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.
Among other precious metals, silver eased 0.1% to $25.18 per ounce while platinum rose 0.3% to $1,077.98.
New waves of Covid-19 are challenging previous optimistic assumptions about the pace of the global economic recovery. The US has warned citizens against travel to the UK, which this week lifted most of the pandemic restrictions.
However, a stronger US dollar made gold more expensive for holders of other currencies. The dollar index held near a 3-1/2-month peak against its rivals as a surge in covid cases drove investors out of risky assets.
Gold is often used as a safe store of value during times of political and financial uncertainty. The precious metal had slumped last month as Fed’s projection showed possibility of two rate hikes by end of 2023. Gold has been volatile since then as market players tried to assess how quickly Fed may start tightening process.
"Gold however bounced back to hit 1-month high as Fed Chairman Jerome Powell once again downplayed inflation risks and warned against premature tapering of bond purchases. Amid other factors, gold was also supported by safe haven buying as increasing spread of the Delta variant has caused countries to tighten restrictions hampering economic activity. Slowdown in Chinese economy and mixed economic data from major economies also dented risk sentiment," Kotak Securities said in a note.
"Gold also benefitted from increased appeal as an inflation hedge as price pressure rises across economies. Increased tensions between US and China also lent support to gold prices. However, weighing on price was weaker investor interest as is evident from ETF outflows and sluggish consumer demand," the brokerage said.