Gold prices gained on Monday taking a signal from the trend in the international market and rising worries over COVID-19 cases. This continues to lift the safe-haven demand of gold and thus prices of the commodity. Gold October futures were trading Rs 156 or 0.28 percent higher at Rs 54,945 per 10 grams while silver September futures advanced Rs 847 or 1.14 percent to hold the Rs 75,000-mark. Market experts got excited when gold prices jump on rising COVID 19 cases and US-China tensions.
Rising pandemic cases and escalating US-China tensions continue to lift the demand of gold on Monday and thus prices of the commodity. However, with the dollar gaining strength after the key US employment numbers and near-record high prices are likely to settle down major buying sentiments of markets.
On a year-to-date (YTD) basis, gold prices have gained over 40 percent while silver rates are up more than 60 percent. Analysts say geopolitical tension of banning the business of Tik-Tok in the US and executive order sanctioning Hong Kong leaders could have triggered a rush to the safety of US Dollars.
After failing to extend the late Friday pullback, gold prices are trading in the vicinity of $2025-$2035. Although COVID concerns will keep gold demand inactive, the recent rise in US Dollars could be cited as the reason for the recent fall. The reason for the strength in the US dollar was signing an executive order by the US President by allowing $400 unemployment benefits.
In the international market, gold prices were steady, following a sharp decline in the previous session. Spot gold remains steady at $2,033.40 per ounce. US gold futures jumped 0.7 percent to $2,042.90. Among other precious metals, silver eased 0.1 percent to $28.28 per ounce, while platinum rose 0.9 percent to $970.12 and palladium rocketed 0.5 percent to $2,188.13. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.46 percent to 1,262.12 tonnes on Friday. As long as the support of $1980 remains undisturbed, expect rallies to continue with immediate resistance seen at $2080 followed by $2280 levels later. A direct drop below $1880 could negate the outlook and take prices lower.
Meanwhile, on the domestic equity front, BSE Sensex was up 291 points or 0.76 percent to trade at 38,331, while the broader Nifty 50 index was ruling above the crucial 11,300-mark.