Gold price shoots up: Rs. 55000 per sovereign! Silver at Rs. 70000/- per kg!
Posted on: 05/Aug/2020 11:47:05 AM
The prices of both gold and silver have shot up globally today (Wednesday, 5th August).
On MCX, gold futures hit a new high price of Rs. 54,797 per 10 gram after it rose 0.45%.
Similarly, silver futures edged 0.09% higher to Rs. 69,861 per kg.
India
As per statistics, in the previous session, gold futures on MCX had rallied about Rs. 900 or 1.7%, hitting Rs. 54,612 at intra-day high.
Silver had surged Rs. 4200 or 6.4% in the previous session.
The World
In global markets, gold prices hit a new high by rising above the important US $ 2,000 mark. A weaker dollar, expectations of more stimulus and rising coronavirus cases boosted the safe-haven demand of gold.
Spot gold was up 0.2% at $2,022.42 per ounce after rising above $2,030 in early session. US gold futures rose 0.9% to $2,039. Among other precious metals, silver fell 0.5% to $24.88 per ounce while platinum dropped 0.9% to $928.95.
The Trend
- This year, gold prices have surged 33% in global markets, also benefiting from record inflows into the gold-backed exchange-traded fund or gold ETFs.
- Unprecedented stimulus from central banks has brought down the interest rates, which has benefited non-yielding gold.
- Further supporting gold, the five-year U.S. Treasury yield on Tuesday hit a record low, while the benchmark 10-year Treasury yield fell to a five-month low.
Reasons for the increasing trend
Gold tends to benefit from the widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.
In this regard, Kotak Securities notified:
“Though gold has turned choppy amid mixed factors, the general momentum is still positive given the challenges to the global economy and strong investor interest.
Gold continues to be supported by safe-haven buying amid increasing challenges to the global economy in the form of rising virus cases and increased US-China tensions. Coronavirus cases have been rising globally and this has forced countries to reimpose restrictions hampering economic activity."
