Resurgence in Covid cases makes gold prices touch new highs

Gold.(File Photo: IANS)

New Delhi:  Bulls were back in the gold trade as the yellow metal touched an all time high Rs 48,289 per 10 grams on the Multi-Commodity Exchange (MCX) on Monday.

This surge in gold futures is in line with a similar trend in the international market, where prices soared owing to the resurgence in novel coronavirus cases across the globe. Experts said that Exchange Traded Funds (ETF) are among major buyers currently.

The spot gold price in the international market touched the highest level in a month and is currently trading at $1,756.14 per ounce, higher by 0.82 per cent from its previous close.

The August contract of gold on the MCX which touched a record high earlier in the day is currently trading at Rs 48,056 per 10 grams, higher by Rs 119 from its previous close.

In India too, the number of cases have been surging every other day.

Market participants and analysts also said that the ongoing tension in the Indo-China border also has added to the uncertainty Indian investors are facing.

Bachhraj Bamalwa, a Kolkata-based jeweller, said although the lockdown has been lifted, businesses have not received much demand, which is a cause of concern. Globally, too, several enterprises are mulling shutting down of operations amid the rising Covid cases, he added.

“Global situation is still not good. Equity markets are not doing good, the situation with regards to corona has not improved yet. And the impact this will have on the economy, is a cause of concern… Safe haven purchasing taking place,” he said.

Bamalwa, who is also a former Chairman of the All India Gems and Jewellery Trade Federation, said that most of the buying globally right now is being done by Exchange Trading Funds.

Retail buying across countries and specifically in India and China, the major retail markets is likely to pick-up by October-September, he added.

Analysts also said that gold prices are unlikely to hold on to the record levels in the near term.