Gold prices in India hit an all-time high in Wednesday’s trade on the back of rising coronavirus cases, demand for safe assets and positive trends in the international market. The yellow metal, in today’s session, surpassed its previous day’s high of Rs 48,825 per 10 grams. On MCX, gold August futures touched a fresh record high of Rs 48,982 per 10 grams, up Rs 204, while silver September futures rose Rs 506 or 1 per cent to rule at Rs 50,891 per kg. Meanwhile, as India entered unlock phase 2, the total coronavirus cases surpassed the 5.85 lakh-mark with the death toll at 17,400. “Bullions may continue to remain positive since safe-haven investment demand is going up. The fears of another virus spread has pushed the investment demand to a multi-year high point,” said Jigar Trivedi, Fundamental Research Analyst – Commodities, Anand Rathi Shares and Stock Brokers.
Gold prices have jumped over 27 per cent from its recent low of Rs 38,400 per 10 grams hit on March 16, 2020. While on a year-to-date basis, the yellow metal has gained nearly 25 per cent in 2020. MCX gold mirrored the Comex gold prices as it surged to its highest in nearly eight years, as a spike in coronavirus cases in the United and States and many other countries has cast a shadow on hopes for a quicker global economic recovery, driving inflows into safe-haven assets, according to Reuters.
Time to buy gold?
Uncertainties regarding the Hong Kong security, fears of a second coronavirus wave are supporting precious metal prices.”The underlying fundamentals are bullish as worldwide, cases are increasing with no signs of slowing down and many of the economies are again initiating lockdown,” said senior technical research analyst Bhavik Patel, Tradebulls Securities. “Investors are recommended to buy on dips and avoid taking any short positions,” he further added.
The key triggers that may impact gold prices are FOMC meeting minutes and ADP employment change. “We believe even after recent stellar performances, the yellow metal will be in demand and continue to rally further,” Jigar Trivedi added.
Demand for the safe-haven asset, rising geopolitical tensions and a weak dollar have lifted investor sentiment. “Increasing coronavirus cases and increase in geopolitical tension between the US, China, India and Iran have supported bullion prices. Lower growth forecast has also provided fuel to the bullions,” said Anuj Gupta, DVP Commodities and Currencies Research, Angel Broking Ltd. “We expect bullion to trade positive in short term,” he added.