Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Tuesday tracking gains in international spot prices that rose near nine-year high as a surge in coronavirus cases lifted investment demand. Hopes of stimulus packages from the US and Europe also supported the yellow metal prices, analysts said.

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At 11 am, gold futures for August delivery rose 0.14 percent to Rs 49,097 per 10 grams as against the previous close of Rs 49,027 and opening price of Rs 49,078 on the MCX. Silver futures traded 2.19 percent higher at Rs 55,188 per kg. The prices opened at Rs 54,802 as compared to the previous close of Rs 54,005 per kg.

International gold prices rose on Tuesday, hovering near a nine-year peak hit in the last session, as worries over a spike in COVID-19 cases and expectations for inflation from more economic stimulus measures boosted demand for the safe-haven metal, Reuters reported.

Spot gold was up 0.1 percent at $1,817.23 per ounce, after hitting its highest since September 2011 at $1,820.06 on Monday. US gold futures were little changed at $1,817.80.

“Gold prices gained due to rise in investment demand after an increase in the COVID cases. US-China trade tensions and hopes of stimulus packages globally also fueled the rally in the bullion prices,” said Jigar Trivedi, Fundamental Research Analyst at Anand Rathi.

Meanwhile, European Union leaders appeared to near an agreement on Monday on a 750-billion-euro stimulus plan for regional economies hit by the pandemic.

Adding to hopes for more economic stimulus, congressional Republicans announced plans to seek another $1 trillion in coronavirus economic relief, Reuters report added.

“Comex gold is trading near the resistance level of $1,820 level. Breaching this, we may an upmove towards Rs 1,835-1,845 levels. For silver, if the prices close above $20 levels, it may test $21-21.30 levels,” Trivedi said.

The sentiment for bullion remains positive and hence Trivedi suggests buying on dips.

“On MCX, support for gold is placed at Rs 48,800-49,000 levels while it may face resistance at Rs 49,200-49,350 levels. Silver may trade in a broad range. Support for silver is seen at Rs 52,000-54,000 levels while resistance is placed at Rs 57,000-59,000 levels,” added Trivedi.

Meanwhile, rupee was trading higher against the US dollar amid upbeat domestic equity markets.

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First Published:Jul 21, 2020 11:14 AM IST