Gold rate rises amid escalating Sino-US tensions, virus threat

Gold prices gained on Friday as escalation of hostilities between the US and China forced investors to seek refuge in the safe haven counter. A sharp increase in coronavirus cases also triggered the investor’s migration to gold. Meanwhile, silver eased in the domestic markets.

India has reported 1.18 lakh cases of the deadly virus with nearly 3,600 fatalities. The country is witnessing the fastest rate of increase in cases in Asia now.

Gold futures were up 0.22 per cent or Rs 102 at Rs 46,490 per 10 grams. Silver futures dropped 0.34 per cent or Rs 160 to Rs 47,175 per kg.

Spot gold markets remained shut due to lockdown in the country to check the spread of Covid-19, according to HDFC Securities.

Globally, gold steadied as an escalation in the US-China tensions underpinned bullion’s safe-haven appeal, although positive economic data and easing lockdowns in some countries set up the precious metal for a weekly drop.

Spot gold was trading at $1,727.39 per ounce by 0248 GMT, having dropped 1.4 per cent on Thursday. US gold futures rose 0.3 per cent to $1,726.50.

Bullion had rallied to its highest since October 2012 on Monday, but has since lost ground and is now heading for a 0.8 per cent weekly decline.

Gold has held ground above the key $1,700 per ounce level, building impetus to reach its 2011 peak in the coming quarters, Fitch Solutions said in a note.

The lower-for-longer interest rates with quantitative easing in full swing, macro and geopolitical uncertainty and strong investor flows should continue to support gold prices on a 6-12 month horizon, Fitch added.

Palladium gained 1.2 per cent to $2,037.40 per ounce, and was looking to post its best week since end-March. Platinum fell 0.6 per cent to $827.62 and silver slid 1.5 per cent to $16.81.

Courtesy: ET Market