Gold rate soars to all-time high; MCX yellow metal futures cross Rs 61,000 mark for first time ever
Gold rate scales all-time high: Domestic gold futures surged on Tuesday evening to reach unprecedented levels, with the June 5 MCX contract crossing the psychologically-important Rs 61,000 per 10 grams level for the first time ever.
Gold Rate above Rs 61,000 per 10 grams: Gold scaled a fresh peak in the evening session on Tuesday, with MCX futures crossing the Rs 61,000 per 10 grams mark for the first time ever. The record high was made in the evening session on MCX, which runs from 5 pm to 11:30/11:55 pm, as the bourse was shut for the morning session for Mahavir Jayanti.
The June 5 contract on MCX surged by Rs 970 or 1.6 per cent to end at a record closing high of Rs 60,984 per 10 grams, having soared by as much as Rs 1,131 or 1.9 per cent to an all-time high of Rs 61,145 in intraday trade. MCX gold futures due for expiry on April 5 finished at Rs 60,667 per 10 grams, with a gain of Rs 951 or 1.6 per cent for the day.
Spot gold inched higher to hover close to its record highs of 2020, last seen quoting at $2,020.4 per ounce as a weakening greenback following US economic data that drove expectations of a pause in benchmark interest rates. The dollar index — which gauges the American currency against six peers other than the rupee — edged down 0.1 per cent.
The money market in India remained shut for the entire day on account of the Mahavir Jayanti holiday. On Monday, the rupee weakened lower by 10 paise or 0.1 per cent to settle at 82.31 against the US dollar.
Gold rate soars to all-time high above Rs 61,000: What experts say
Analysts remain divided over the recent surge in gold, which has grown more than nine per cent in value so far in 2023.
The trend in gold continues to be positive given the wild swings in the global financial markets and the weakness in the rupee... The global benchmark has taken out the $2,000 (per ounce) level and may make a new high at $2,100," Ajay Kedia, Founder and Director, Kedia Advisory, told Zeebiz.com.
"Technically, the surge in gold prices is driven by short-covering, as dovish comments from the Fed continue to put pressure on the dollar index... Weakness in the rupee is likely to continue, given the rise in crude oil, which is likely to boost gold further. The overall trend in 2023 is likely to remain positive, towards a year-end target of Rs 65,000 though some profit-booking is possible until then," Kedia added.
However, not everyone on the Street is bullish on gold.
EDITOR'S TAKE: What Anil Singhvi thinks about using gold to create wealth
Last week, Zee Business Managing Editor Anil Singhvi said he expects equities to start to outperform the precious metal soon. He said gold can help investors "make money but not create big amounts of wealth".
"One has to think long term while judging returns," said Singhvi, touching upon the age-old debate of stocks versus gold. Read more on what Anil Singhvi thinks of buying gold to create wealth
Gold rate at record high: Key factors driving the yellow metal
- An extended fall in the dollar index to two-month lows; weakness in the dollar makes gold more attractive for those holding other currencies
- US manufacturing PMI remaining in contraction mode, dips to a nearly three-year low
- US job openings hitting a nearly two-year low in February
- A surprise output cut by OPEC+ grouping of top producers that sent crude oil rates jumping to levels to the tune of $85 a barrel
- Sustained weakness in the rupee
"We expect the dollar index to remain volatile this week and test its support level of 100.85 again.... However, the decline in the dollar index, rising foreign exchange reserves, narrowing trade deficits and a rebound in the domestic equity markets could support the rupee in the short term," said Manoj Kumar Jain, Head-Commodity and Currency Research at Prithvi Finmart.
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10:19 AM IST