Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Friday as investors rushed for safe-haven buying on escalating tensions between the United States and China amid concerns over the rising coronavirus-infected cases in India, analysts said.

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At 12:30 pm, gold futures for June delivery gained 0.39 percent to Rs 46,588 per 10 grams as against the previous close of Rs 46,405 and opening price of Rs 46,523 on the MCX. Silver futures traded 0.23 percent higher at Rs 48,670 per kg. The prices opened at Rs 48,710 as compared to the previous close of Rs 48,558 per kg.

“The increasing tension between the US and China is weighing on investor risk appetite. Lower interest rate scenario and hopes of additional stimulus from the government and central bank are all supportive of gold prices,” said Amit Sajeja Associate VP, Research Commodities & Currencies, Motilal Oswal.

Meanwhile, strong Indian rupee kept a check on gains in gold prices. The rupee extended early gains and was trading higher by 14 paise, amid minor recovery seen in the domestic equity market.

In the global market, gold inched up and was on track for its second monthly gain as deteriorating US-China ties in a world reeling from the coronavirus pandemic rattled investors and fuelled demand for the safe-haven metal.

China's parliament on Thursday pressed ahead with national security legislation for the city, raising fears over the future of its freedoms and function as a finance hub.

Spot gold was up 0.1 percent at $1,719.47 per ounce by 0342 GMT. US gold futures rose 0.3 percent to $1,717.60. However, the metal was down for the week, having dropped to a two-week low on Wednesday as easing lockdown measures around the world boosted hopes of an economic recovery.

“Reopening of major economies pressurized the yellow metal prices. However, the trend remains positive and prices may move towards $1,770 going ahead. Thus buy on dips is advised,” Sajeja added.

On MCX, Sajeja advises buying gold above Rs 46,650 level for a target price of Rs 47,000 per 10 grams.

"The undertone for gold price remains positive. Any correction in the prices may be used as a buying opportunity as fundamentals remain strong," Sajeja said.