Gold prices continue rally after hitting Rs 50,000 per 10 gm yesterday; hit new all-time high today

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Published: July 23, 2020 10:15 AM

On MCX, gold August futures edged Rs 171 higher to touch a fresh all-time high of Rs 50,249 per 10 grams. Similarly, silver September futures gained Rs 170 to trade at Rs 61,285 per kg

gold, gold rate, gold price todayAnalysts say that the up move in gold prices was due to many factors such as sharp losses in the US dollar, additional stimulus measures, robust investor inflows, rising coronavirus cases and US-China tensions

Continuing the rally, gold prices hit a fresh all-time high for the second consecutive day on Thursday, reflecting the firmness in the international market. The yellow metal has surpassed the previous record high of Rs 50,199 per 10 grams hit in the intraday session yesterday. On MCX, gold August futures edged Rs 171 higher to touch a fresh all-time high of Rs 50,249 per 10 grams. Similarly, silver September futures gained Rs 170 to trade at Rs 61,285 per kg. Analysts say that the up move in gold prices was due to many factors such as sharp losses in the US dollar, additional stimulus measures, robust investor inflows, rising coronavirus cases and US-China tensions. “The market awaits for the US to announce a huge stimulus package. The dollar too has weakened hence sentiments are positive amid worsening the US-China trade spat,” said Jigar Trivedi, Fundamental Research Analyst at Anand Rathi Shares and Stock Brokers.

Besides, MCX silver also surpassed the Rs 62,000 per kg mark in the previous session, following the trend in the international market as rising coronavirus cases kept traders jittery reacted to virus and geopolitical news. “Looking at the trade tensions, we expect bullion to remain in limelight for the remaining of the year,” Trivedi added.

Globally, gold rose to its highest in nearly nine years on Thursday, driven by an escalation in U.S.-China tensions, while the expectation of more stimulus measures lifted the metal’s appeal as an inflation hedge. Spot gold was up 0.1 per cent at $1,872.75 per ounce. US gold futures rose 0.2 per cent to $1,869.30. Reflecting investor sentiments, SPDR holdings rose 0.4% to 1,225.01 tonnes on Wednesday from 1,219.75 tonnes on Tuesday. “Deepening negative yields are fueling a frenetic rally in gold that’s boosting the precious metal toward a record. The US gave China 72 hours to close its consulate in Houston amid accusations of spying, marking a dramatic deterioration in relations between the world’s two biggest economies. The tit-for-tat between the two countries is likely to further deteriorate the global economic outlook as it reels under the impact of the pandemic,” said Navneet Damani, Vice President, Motilal Oswal Financial Services.

Analysts say fall in the value of other asset classes and global uncertainties have also helped gold climb record high levels. Gold is traditionally used as a hedge against inflation, and global economies are considering further stimulus to boost growth which may fuel inflation further. “We expect precious metals to trade firm until the number of global cases of COVID19 is under control or a vaccine is introduced in the market which is still a few months away,” said Nish Bhatt Founder & CEO, Millwood Kane International.

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