Gold prices rise as US-China tension, coronavirus cases spike; still down Rs 1,000 from record high

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Published: May 26, 2020 12:15 PM

On MCX, gold June futures were up 0.28 per cent or Rs 132 at Rs 47,105 per 10 grams. While silver July futures advanced 1.39 per cent or Rs 670 to Rs 48,927 per kg

gold price, gold rates todayLingering geopolitical tensions like the US-China cold war and Iran-Venezuela oil trade amid US sanctions are likely to boost the yellow metal prices

Gold and silver prices ticked up in Tuesday’s session on the back of a sharp rise in coronavirus cases which triggered investors to rush to safe-haven assets. Besides, escalation in US-China trade tension also increased gold demand. On MCX, gold June futures were up 0.28 per cent or Rs 132 at Rs 47,105 per 10 grams. While silver July futures advanced 1.39 per cent or Rs 670 to Rs 48,927 per kg. Despite today’s gain, gold prices are still Rs 1,000 off from a record high of Rs 47,929 per 10 grams. “Lingering geopolitical tensions like the US-China cold war and Iran-Venezuela oil trade amid US sanctions are likely to boost the yellow metal prices,” said Hareesh V- Head Commodity Research at Geojit Financial Services. “Meanwhile, reopening the global economy and gains in equities are likely to offset major rallies in the counter,” he added. 

The total number of coronavirus cases in India witnessed a sharp spike of 6,535 new cases and 146 deaths. The total number of cases in the country now stands at 1,45,380 and the death toll has reached 4,167. “As long as prices stay above $1710, broad trend will remain on the positive side. However, a direct drop below $1665 is a signal of weakness,” Hareesh said.

Globally, gold ticked higher on Tuesday as brewing Sino-U.S. tensions over Hong Kong lifted demand for the safe-haven metal, though easing coronavirus-induced lockdown restrictions supported equities and capped bullion’s gain, according to Reuters. Spot gold rose 0.2% to $1,732.38 per ounce. US gold futures were down 0.1 per cent to $1,733.50. Among other precious metals, palladium gained 1.1% to $2,013.98 per ounce, platinum added 1.3% at $849.32, and silver rose 0.8% to $17.34. “Market participants will keep an eye on the US consumer confidence data scheduled later today; a weaker than expected number could lend support to gold prices,” said Navneet Damani, VP, Motilal Oswal. “Broader trend on COMEX could be in the range of $1720-1770 and on domestic front prices could hover in the range of Rs 46,650-47,450,” Damani added.

Meanwhile, the domestic equity market benchmarks were trading with gains on Tuesday. BSE Sensex was trading at 30,825.03, up 152.44 points or 0.50 per cent while the broader Nifty 50 was ruling 49 points or 0.54 per cent down at 9,088.

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