News By/Courtesy: Nikitha M | 27 Jul 2020 14:02pm IST


  • Gold is used as a safe store value
  • The relation between US and China
  • Price of gold and silver in the markets

Gold is often used as a safe store of value during times of financial and political uncertainty. The yellow metal is also helped by aggressive monetary easing (long term securities from the open market to increase the money supply and encourage leading and investment) adopted by various central banks around the world since the pandemic plunged the global economy into a recession. Some investors worry that such an unprecedented level of money printing could lead to inflation. These measures have pushed bond yields significantly lower, a significant tailwind for gold.

Analysts are watching continued weakness in the US dollar as a supportive factor for higher gold prices. Tensions have soared between the US and China on a range of fronts including trade. The relation between China and the US has deteriorated in recent days in a cold war-style standoff, China’s handling of the COVID-19, and tough new security for Hong Kong. Chinese authorities took possession of the closed consulate in Chengdu after Beijing ordered the Chengdu Mission to be shut in retaliation for the forced closure of Beijing’s consulate in Houston, Texas. Mike Pompeo, The US Secretary of State took a fresh aim at China saying, Washington and its allies must use more creative and assertive ways to press the Chinese Communist Party to change its way.

Domestic gold prices surged to record high today, tracking the trend in the international market as tensions between the China and US and growing worries about the economic conditions are fuelling the move towards a safe haven. Gold futures on MCX rose 1.5% or Rs.800 to a record high of Rs.51,833 per 10 gram, tracking a global rally. Silver futures on MCX gained 5.5% or Rs.3400 to Rs.64,617 per kilogram. In global markets, Spot gold was up 1.5% to $1,928.40 per ounce. The dollar index fell 0.5% to a multi-year low against its key rivals, making gold less expensive for the holder of other currencies.

This article does not intend to hurt the sentiments of any individual, community, sect, or religion etcetera. this article is based purely on the author's personal views and opinions in the exercise of the fundamental right guaranteed under Article 19(1)(a) and other related laws being a force in India, for the time being.

Section Editor: Pushpit Singh | 27 Jul 2020 19:45pm IST

Tags : Gold and Silver price surge

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