Gold prices in India on Wednesday hit a fresh record high of Rs 46,785 per 10 grams as the jump in coronavirus cases and lockdown extension till May 3 made investors anxious who rushed to safe-havens. Gold June futures were up 0.92 per cent or Rs 427 to Rs 46,713 per 10 grams. Silver May futures gained 1.59 per cent or Rs 694 to Rs 44,450 per kg on MCX. Gold prices hit almost a seven high in the session amid concerns over global economic growth and a wave of stimulus measures from central banks and governments, says Navneet Damani, VP, Motilal Oswal Financial Services. “The retreat from riskier assets followed the IMF prediction on Tuesday. Apart from that, continuous gold buying activity is also lending support to gold prices. Broader trends on COMEX could be in the range of $1695-1750 and on domestic front prices could hover in the range of Rs 46,450-47,000,” Damani said.
Spot gold markets remained shut on Monday due to the nationwide lockdown to curb the spread of COVID-19. Globally, spot gold was trading at $1,727.59 per ounce, having touched its highest since Nov. 2012 at $1,746.50 in the previous session. US gold futures fell 0.9 per cent to $1,752.20 an ounce. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.8 per cent to 1,017.59 tonnes on Tuesday. On the other hand, Palladium fell 0.6 per cent to $2,205.25 per ounce and silver dropped 1.1 per cent to $15.64, while platinum advanced 1.1 per cent to $783.25 an ounce. Reuters reported.
What’s fuelling gold prices-
The global economy is expected to shrink by 3% during 2020 in a stunning coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s, the International Monetary Fund said on Tuesday. “Safe-haven demand, lockdown situation and weakness in the dollar increased the demand for investment in the safe-haven asset class product like gold. Low-interest rate and global growth forecast cut down by IMF provided extra fuel to gold prices,” Anuj Gupta, Deputy VP- Commodities & Currencies Research, Angel Broking Ltd said. “We are expecting this rally may continue and gold may test 49000 to 50000 on MCX and in the international market in may test $1780 to $1800 soon,” Gupta added, maintaining his bullish stance on the yellow metal.
Gold prices have jumped nearly 22 per cent from its recent low of Rs 38,400 per 10 grams hit on March 16, 2020, while silver futures surged 32 per cent from its recent low of Rs 33,580 per kg. Easing measures taken by various central banks and fear of a global recession amid the negative economic impact of coronavirus are among the few factors supporting the yellow metal.