Gold prices jump sharply, silver surges ₹2,500 in a day

Gold prices jump sharply, silver surges ₹2,500 in a day

Gold and silver prices rose sharply in India after remaining range-bound for most part of the week. Gold futures on MCX rose ₹650 or 1.3% to ₹50,817 per 10 gram while silver futures surged 4% or ₹2,500 to ₹62,955 per kg on Friday. A softer US dollar and hopes of fresh US stimulus lifted global rates. “Precious metals gained on feeble dollar and on anticipation of US stimulus package. MCX precious metals moved in tandem with global benchmarks.” Geojit Financial Services said in a note.

US gold futures jumped over 2% on Friday to $1,925 an ounce. The dollar meanwhile slid 0.7% as expectations grew for a Biden win, making gold cheaper for those holding other currencies.

Low interest rates and unprecedented money printing by central banks to ease the economic blow from the coronavirus pandemic have driven a 26% rally for gold this year.

Additionally, a widening lead for Democratic presidential candidate Joe Biden has raised the prospect of further stimulus, adding to gold’s allure, say analysts.

The Trump administration is boosting its offer in COVID-19 aid talks in hopes of an agreement before Election Day. Trump on Friday took to Twitter to declare: “Covid Relief Negotiations are moving along. Go Big!”

A further drop in the dollar could add more fuel to the gold rebound, say analysts.

In India, the seventh tranche of sovereign gold bonds will open for subscription on Monday. The issue price for the sovereign gold bond has been fixed at ₹5,051 per gram of gold, the Reserve Bank of India (RBI) said in a statement on Friday.

“The nominal value of the bond based on the simple average closing price for gold of 999 purity of the last three business days of the week preceding the subscription period…works out to ₹5,051 per gram of gold,” the RBI said.

Investors who apply online and make payment through digital mode get a discount of ₹50 per gram. For such investors, the issue price of gold bond will be ₹5,001 per gram of gold.

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