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Gold price in India rises for the second day
June gold futures prices rose 0.7% to Rs 45,830 per 10 gram on the Multi Commodity Exchange (MCX), against a gain of Rs 650 per 10 gram in the previous session. July silver futures edged 0.44% higher at Rs 41,780 per kg.
Gold price in the domestic market rose for the second day in a row on Monday amid rising tensions between US and China and as lockdown restrictions were eased in large parts of India.
June gold futures prices rose 0.7% to Rs 45,830 per 10 gram on the Multi Commodity Exchange (MCX), against a gain of Rs 650 per 10 gram in the previous session. July silver futures edged 0.44% higher at Rs 41,780 per kg.
This two-day gain in domestic gold prices has come after a four-day slide in the price of the yellow metal amid swings in global risk-on, risk-off sentiments.
The yellow metal for August delivery edged up by Rs 328, or 0.72%, to Rs 46,024 per 10 gram in a business turnover of 6,221 lots.
According to analysts, fresh positions built up by participants on spot demand mainly led to rise in gold prices.
Globally, gold prices steadied as a strong US dollar countered support from rising tensions between the United States and China over the coronavirus outbreak.
Spot gold was steady at $1,699.49 per ounce by 0601 GMT (11:31am in India), having gained over 1% on Friday after US President Donald Trump threatened to impose tariffs on China. US gold futures gained 0.4% to $1,707.90.
“Some sort of fears are there that the trade war might be ignited and such events are good for gold. All these comments from officials indicate a new round of hostility as far as the trade is concerned with China,” Avtar Sandu, senior commodities manager at Phillip Futures, was quoted as saying by Reuters.
Gold had risen 18% last year as the China-US trade dispute increased demand for the safe-haven amid interest rates cuts by the US central bank.
The US dollar moved away from an over one-month low on Monday, making gold costlier for investors holding other currencies.
“US dollar demand is competing for the safe-haven lustre in Asia this morning,” Stephen Innes, chief market strategist at financial services firm AxiCorp, said in a note.
On the macro front, investors will be watching out for the April US jobs report due on Friday.
“Beyond the rhetoric from Washington, we would expect gold to consolidate until the non-farm payrolls figures are out. A decline in the (unemployment) numbers wouldn’t be good for gold prices,” Phillip Futures’ Sandu said, according to Reuters.
The Federal Reserve has kept interest rates at near-zero, with other central banks and governments taking similar measures to cushion their economies from the impact of the pandemic.
The widespread fiscal and monetary impetus will support bullion in the longer term as it is often seen as a hedge against inflation and currency debasement, analysts said.
Reflecting an appetite for gold, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 1.1% to 1,067.90 tonnes on Friday.
(With agency inputs)
