Gold prices hiked on Friday, globally with the metal’s safe-haven demand held up by concerns over the second wave of coronavirus infections, although the gains were limited by a stronger U.S dollar. Gold price edged higher while silver slipped in early trade amidst rising Covid-19 risk and tensions between India and China.
This Monday, Gold price witnessed the greatest hit in the past 8 years. A hike in coronavirus cases kept the demand for safety elevated, although powerful equities and positive U.S services sector tried to data limit the metal’s rise. Gold rose by 0.5% to $1,784.21 per ounce. U.S gold futures were up by 0.2% at $1,793.00 per ounce.
Investors are in doubt if the recovery is possible and it might take time for the recovery with the present crisis, and that should be supportive of gold prices. In counties like Australia, India, and Mexico, the number of cases reported still continued to increase, also almost 15 states in the US have reported a rise in the new Covid-19 cases. Platinum was up by 2.9% at $823.00 per ounce, Palladium rose by 0.6% to $1,935.10 per ounce, and Silver gained 1.3% to $18.28 per ounce.
India has reached a state of 3.8 lakh Covid-19 patients and fatalities climbed above 12,600 levels. Also, the tensions that were prevailing about India and China disputes, eased as they had multiple rounds of talk. Last Thursday amidst all these, gold in the national capital gained Rs 280 to Rs 48,305 per 10 gram, portraying a rally in international prices of the yellow metal, according to HDFC Securities. The imposition of travel bans in Beijing to stop the coming of a second Covid-19 wave, has renewed fears of a delay in economic recovery as countries reopen after COVID-induced lockdowns.
Gold “the precious yellow metal” is often considered as a safe-haven investment during times of economic, financial, and political uncertainty. The second risk of a wave of the infections in certain countries also increased the worries of the investors making them move away from riskier assets. It raised expectations of further stimulus measures and lower interest rates.
Taking the current trend into account, the gold value is expected to move higher in the upcoming days. Massive stimulus measures tend to support gold as it is used as a hedge against inflation and currency debasement.