Gold, silver prices rise

NEW DELHI, Oct 12 (The Economic Times): Gold and silver prices edged higher in Indian markets on Monday.

On MCX, December gold futures edged up 0.4 per cent to 51,016 per 10 gram, rising for the third day, while silver jumped 1.4 per cent to 63,769 per kg.

Gold and silver had finished the previous session on a strong note, rising 1.2 per cent and 4 per cent respectively. In global markets, gold prices edged lower on the day, falling from three-week highs hit earlier in the session. A stronger US dollar and uncertainty over US stimulus package put pressure on gold.

Spot gold fell 0.2 per cent to $1,925.29 per ounce, after hitting $1,932.96 earlier in the session. The dollar index was up 0.07 per cent against rivals, making gold more expensive for holders of other currencies. The uncertainty over US stimulus saga continued, with President Donald Trump and House Speaker Nancy Pelosi blaming each other for a lack of progress on a deal.

Among other precious metals, silver eased 0.4 per cent to $25.02 per ounce, platinum fell 1 per cent to $876.80, and palladium was down 0.2 per cent to $2,435.35.

The White House on Sunday changed tactics yet again on boosting the pandemic-hit US economy, this time urging lawmakers to back a plan to help small businesses weeks ahead of the presidential election. The change comes after President Donald Trump's Republican Party and Democrats both rejected, for different reasons, a beefed-up $1.8 trillion economic rescue plan proposed Friday.

Unprecedented stimulus measures by governments and central banks across the world have pushed up gold prices this year despite the correction from August highs. In India, gold prices are up around 29 per cent so far this year, tracking a global rally.

Analysts say that hopes of a bigger stimulus package if Democrats come to power in the US and uncertainty over global economic recovery will lend support to the precious metal at lower levels. In August, gold futures in India had hit record highs of 56,200 per 10 gram.

Ahead of the festive season, the Indian government has come up with another tranche of sovereign gold bonds that opened for subscription today. The RBI on behalf of the government will issue gold bonds at 5,051 per gram of gold. Investors applying online and making payment through digital medium get discount of 50 per gram. The issue closes for subscription on October 16.

Meanwhile, dealers sold physical gold was sold at a premium in India last week for the first time in two months as jewellers stocked up ahead of the festive season. In India, gold prices include 12.5 per cent import duty and 3.0 per cent.