Gold prices moved higher in Indian markets today, as the precious metals extended recent gains in global markets. On MCX, gold futures rose 0.45% to ₹52,404 per 10 gram while silver surged 1.5% to ₹66,309 per kg. Gold prices had rallied sharply last week, gaining around ₹1,500 per 10 gram over 5 days. On the other hand, silver had logged weekly gain of about ₹4,000 per kg. In August, gold had hit a record high of ₹56,200 per 10 gram.
“MCX gold has resistance at ₹52,960 and support at 51820,” says Geojit Financial Services.
Globally, gold prices today edged higher, supported by a weaker dollar and hopes of more US stimulus amid optimism about the outlook under a Joe Biden presidency. Gold rose 0.2% to $1,955.76 an ounce. Gold’s precious metal cousin, silver, rose 0.5% to $25.72 per ounce while platinum gained 0.8% to $896.
“While prices stay above $1920 intraday bias continue with positive momentum. However, break above the stiff resistance of $1980 is needed to trigger major rallies. Immediate downside turnaround point is seen at $1855,” Geojit said.
The dollar index was hovering near a more than two-month low of about 92.177. A weaker US dollar means gold becomes more affordable to investors holding other currencies and could potentially increase the demand of the precious metal. Gold is mostly traded in US dollar and India is a big importer of gold.
“MCX gold edged higher, in tandem with international price, pushed up by a weaker dollar and expectations of more stimulus support under US president elect Joe Biden. Biden and his team is already working on plans to tackle the crisis. The spotlight will also be on the Fed for further support to revive the economy. Overall the sentiment is likely to be positive,” said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
Some money remaining on the sidelines moved into gold ETF as it became clear that Joe Biden will win the US Presidency. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund or gold ETF, rose 0.63% to 1,260.30 tonnes on Friday.
Gold also benefitted from concerns over rising coronavirus cases across the world. Global COVID-19 infections has exceeded 5 crore mark.
While Biden declared victory and prepared to navigate America’s pandemic-hit economy out of crisis, the unresolved status of Senate control may dampen prospects for major stimulus before January, say analysts. Gold tends to benefit from widespread stimulus as it is considered a hedge against inflation. Biden promised swift action against the pandemic and an orderly transfer of power during his victory speech over the weekend.