Gold prices on Friday (June 19, 2020) jumped marginally for second consecutive day. On the MCX, gold August contract in early trade gained Rs. 13.00 or 0.03% to 47368.00 and recorded early high of Rs. 47399 per 10 gm.
Gold of 22K and 24K is retailing at Rs. 46110 and Rs. 47110 per 10 gm.
In the previous trading day, defying declining gold prices trend in the overseas market, gold inched higher in India. In the Mumbai bullion market, gold prices surged by Rs. 119 to Rs. 47496 per 10 gm. On the MCX too, after losing in the initial trade, towards the end gold settled marginally higher by 0.04% or Rs. 17 at Rs. 47355 per 10 gm.
Mixed Cues for Gold
1. Beijing claims to have contained the second wave of coronavirus infection. On Thursday as per a medical expert, the city which saw the corona cases resurface after 2-months has managed to bring its latest coronavirus outbreak under control
2 Jobless benefit claim dropped for the 11th straight week, pointing to recovery in the US economy. In March there were logged record claims of 6.87 million.
3. Jerome Powell, US Fed Chair earlier during the week raised concerns on slower recovery and said "significant uncertainty remains about the timing and strength of the recovery."
4. After Bank of Japan, Bank of England too has increased its bond buying program by another 100 billion pounds but at the same time reduced the pace of such purchases.
5. The dollar heads for the best weekly gains as resurfacing of coronavirus adds to the economic gloom and investors shift to the world's reserve currency. And any gains in the dollar cap the upside in gold as its 'safe haven' appeal takes a hit.
In foreign exchange markets, the dollar headed for its best week in a month against a basket of major currencies as a resurgence in coronavirus cases knocked confidence in a rapid economic recovery and drove investors to the safety of the world's reserve currency.
Upward momentum shall still remain in gold though
Despite all the positive news on economic recovery front, gold prices will remain on the higher side due to virus woes and lower interest rates and stimulus bail-outs from central banks. Nonetheless, lower demand as well the strength may check huge gains in the precious yellow metal.