Gold prices in India on Friday (August 28, 2020) surged after previous day's fall. On the MCX, October gold futures at 12:35 pm quoted higher by 0.48% or Rs. 243 at Rs. 51145 per 10 gm, while silver also edged higher by 1.16% or Rs. 759 to Rs. 65949 per kg. On Thursday, there was seen a sharp plunge in prices of both gold and silver, by Rs. 900 and Rs. 2500, respectively. On August 7, gold hit a fresh all time high of Rs. 56200 per 10 gm.
Globally, gold rates have been steady after a steep decline in the previous day's trade of over 1%. Spot gold was marginally up by 0.1% at $1929.94 per ounce. This is as the coronavirus-induced economic fall-out worries outweighed the gains in US treasury yields, which got support after the US Fed Reserve Chair Jerome Powell offered new approach on inflation and also said interest rates will remain low.
On the inflation front, Fed offered more headroom with inflation seen averaging 2 percent over time, a measure allowing increase in prices to trend still higher.
Nonetheless, supporting gold prices is the economic cost due to the pandemic. Last week, the number of the US citizens making new claims for unemployment benefits was around 10 lakh, which is indicative of the fact that the recovery in the labour market continues to be slow amid the pandemic.
Back in India, prices of 24K and 22K gold are Rs. 51360 and Rs. 50360, respectively per 10 gm. Also the subscription for sixth tranche of sovereign gold bonds or SGBs of this fiscal year will open on August 31.