Gold prices in India today extended gains, hitting a new high amid a global rally. On MCX, August gold futures rose 0.7% to ₹48,289 per 10 gram. Tracking gold, silver also posted strong gains. July silver futures on MCX rose 1.2% to ₹49,190 per kg. Gold and silver prices had surged 1.2% and 1.5% in the previous session.
In global markets, gold prices today hit a one-month high as a surge in coronavirus cases dented investor sentiment towards riskier assets. Worries about a delay in global economic recovery prompted investors to seek the safe-haven metal. Spot gold was up 0.4% at $1,749.54 per ounce after earlier hitting $1,751 during the session. US gold futures jumped 0.6% to $1,763.80 per ounce.
Among other precious metals, silver gained 1% to $17.78 and platinum climbed 0.7% to $811.10.
Fears of uncertain virus situation which could dent the ongoing economic recovery pace and geopolitical tensions supported sentiments in gold, Geojit Financial Services said in a note.
The World Health Organization or WHO on Sunday reported that global coronavirus cases rose a record 183,020 in a 24-hour period. Apple on Friday said it would temporarily shut some US stores as coronavirus cases continue to rise in southern and western states.
Gold prices have also been lifted by a wall of cash from governments and central banks around the world as they continue to provide much-needed support to pandemic-hit economies.
Gold is used as a safe investment during times of political and financial uncertainty. Indicative of the risk-averse sentiment, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), said its holdings rose 2.03% to 1,159.31 tonnes on Friday from 1,136.22 tonnes on Thursday.
However, retail physical demand of gold across major Asian hubs remained subdued as prices surged though there are expectations that the market may start to recover.
In India, dealers were offering a discount of up to $13 an ounce over official domestic prices last week, Reuters reported. This is down from last week’s $20. Domestic gold prices include 12.5% import tax and 3% GST.