Gold prices in India hit new highs for the second day in a row. On MCX, August gold futures rose 1% to a new high of ₹50010 per 10 gram. This is the first time gold prices in India have touched ₹50,000 for the first time in futures market. September silver futures on MCX jumped 6.6% to ₹61,130 per kg. Gold prices had surged 1% or about ₹500 in the previous session. On the other hand, silver had jumped 6% or about ₹3,400 per kg in the previous session, extending its Monday’s ₹1,150 gain.
In global markets, spot gold prices rose 1.3% to $1,865.81 an ounce, the highest in almost nine years. A softer US dollar, surging coronavirus cases across the world and expectation of more stimulus measures lifted prices of precious metals, including gold and silver. Spot silver prices climbed as much as 7.2% to $22.8366 an ounce, the highest since 2013.
Silver has surged on expectations of a rebound in industrial activity as hopes of vaccines rise.
On Tuesday, European leaders agreed on a massive stimulus plan of $865 billion to fuel recovery from the economic drag caused by the COVID-19 pandemic. In the US, White House officials and top congressional Democrats discussed on another round of stimulus that would include extended unemployment insurance.
“Gold has moved higher as demand was boosted by worries over a spike in COVID-19 cases and expectations of more stimulus measures. EU leaders agreed on a 750-billion-euro stimulus plan for regional economies hard-hit by the pandemic. The US is also working on a $1 trillion relief bill,” said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
The US dollar index held near a more than four-month low, making gold less expensive for holders of other currencies.
As coronavirus cases continued to surge in the US to about 3.9 million, President Donald Trump said the virus would probably get worse before it gets better. Gold is used as a safe investment during times of political and financial uncertainty.
Investors have flocked to the precious metals on surging demand for safe havens amid a resurgence in virus cases and concerns over economy.
SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund or gold ETF, said its holdings rose 0.7% to 1,219.75 tonnes on Tuesday