Gold prices in India
Gold prices in Indiaremained supported on Tuesday (September 1, 2020) on dismal economic data. On the MCX gold October futures edged higher by 0.68% or Rs. 351 to Rs. 52052 per 10 gm. Silver also rallied close to 2% for the second consecutive day, scaling to a price of over Rs. 68500 per kg.
International gold rates
In the global market, gold prices remained unchanged near a two-week high as softer dollar and low-interest rate regime, continued to boost safe-haven demand for the precious yellow-metal. Gold prices in the spot market were slightly changed at $1968.98 per ounce, after it hit an almost 2-week of $1976.14 in the previous trading session. US gold futures however fell by a tad 0.1% to $1,975.80.
The dollar index once again is hovering close to an over 2-year high, rendering gold less expensive for holders of other currencies.
Last week, the US Fed Chair Jerome Powell signaled of an accommodative policy stance and said interest rates are to stay lower for longer. Adding to this Fed Vice Chair Richard Clarida on Monday said that as part of the new policy stance of the US Fed, lower rate of unemployment does not on its warrant an increase in interest rates.
During low interest rate regime gold gains appeal and gets pricier, thereby reducing the opportunity cost of holding non-yielding metal.
Also, supporting gold is the rise in Covid 19 cases across the globe, with latest tally of coronavirus positive cases as per Reuters hitting 25.38 million mark and 847,287 deaths.
Back in India, GDP numbers for the April-June quarter of fiscal year 2021 released on Monday showed steep contraction by 23.9%, which could further lend support to the bullion.