On Thursday, gold prices in India rose slightly despite a drop in international rates.
On MCX (Multi Commodity Exchange of India), gold futures (December 2020) were trading 0.18 percent or Rs 88 higher at Rs 50,257 per 10 grams.
In the international market, spot gold was down 0.9 percent at $1,860.61 per ounce while US gold futures also fell 0.9 percent to $1,859.60, on the back of a stronger dollar. When equity markets and the US dollar rally, the demand for gold subsides.
Global stock markets, including India, have been surging on a gain in risk sentiment among investors as prospects of an effective COVID-19 vaccine overshadowed worries over surging infections. However, the decline in gold rates has been curbed by the logistical challenges of distributing the Pfizer vaccine in hundreds of millions of doses once it becomes available.
The vaccine shots are required to be thawed at -70 degrees celsius and injected within five days to prevent them from going bad. Making its distribution an expensive affair.
Meanwhile, a stronger dollar also makes the precious metal expensive for buyers in other currencies.
After closing 18 paise lower on Wednesday at 74.38 against the US dollar, the Indian rupee slumped further to open at 74.44 on Thursday.
Experts say that the long-term outlook for gold is bullish and global economic recovery is bound to take time. All eyes are now on government and central bank support of various countries.