Gold prices in India broke all the records, breaching the ₹47,000 marks per 10 gram for the first time. On MCX, June gold futures rose as much as ₹47,095 per 10 gram. Recently, they were trading 0.6% higher at ₹46,995. Silver rates also moved higher. May futures on MCX rose 0.2% higher to ₹44,120 per kg. Global gold prices have rallied to multi-year highs amid fears of a deeper recession. A weaker rupee, which fell to a record low of 76.85 against the US dollar, also lifted domestic prices of gold.
In global markets, gold prices moved higher as downbeat US economic data heightened fears of a deeper global recession due to coronavirus. Spot gold rose marginally to $1,717.20 per ounce with gains capped by a strong US dollar. Overnight, data showed US retailers suffered a record sales collapsed in March due to the outbreak but a flight to safety pushed the dollar higher against its peers.
Among other precious metals, silver slipped 0.6% to $15.38 and platinum fell 1.1% to $770.80.
The spread between spot and futures gold price in global markets has narrowed, showing some easing about tightness concerns, says Kotak Securities in a note.
“Futures moved to a steep premium amid concerns that deliveries may be impacted due to virus-related restrictions. Gold has surged to multi-year highs and while overall sentiment is positive, lack of significant fresh triggers could result in bouts of profit-taking hence one must wait for corrective dips to create long positions,” the brokerage said.
Investment demand for gold continued to rise. The holdings SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.4% to 1,021.69 tonnes on Wednesday.
Virus related development, statements from central banks and governments on economic impact and stimulus measures and the movement of US dollar as well as general risk sentiment will guide the price movement of gold and silver in the near term, say analysts.
Back in India, the government has announced the timeline for issuance of sovereign gold bonds, which pay an annual interest of 2.5% and have a maturity of eight years.
The issue price of the bonds will depend then-prevailing price of gold. These bonds will open for subscription six times in the first half of this fiscal, April to September.