Gold prices in India hit new highs in line with overseas commodity markets on concerns of the COVID-19 pandemic which has brought global economy on brink of recession.
As per commodity traders, fresh trade tensions between US and China, concerns over the next wave of coronavirus breakout and stimulus measures amid worries of a deeper global recession kept the demand for the safe-haven asset high.
Tracking weak opening of domestic equities and sustained foreign fund outflows, Gold Futures for June on MCX gained Rs 369 to trade at 47750 per 10 gm, after rising to the day's high of 47929.
Significant rise in coronavirus cases, an extension of lockdown for two more weeks kept demand for the risk-averse asset high in domestic market.
Globally, gold continued to climb today on concerns over US-China trade relations and comments by Fed head Powell, that encouraged investors picking the yellow metal.
Worries regarding the souring US-China relations, flood of liquidity from central banks and bleak US economic data kept the safe-haven metal in high demand.
Spot gold on Monday rose about 1% to $1,760, the highest since October 2012, and later traded up 0.85%.
Federal Reserve Chairman Jerome Powell said that the US, the world's largest economy, which has been thrown into a recession due to the coronavirus pandemic, will rebound from the recession but the recovery could stretch through the end of next year. He added the economy may need a coronavirus vaccine to fully recover.
Anuj Gupta (DVP-Commodities & Currencies Research, Angel Broking said, "Dovish comments by Fed chairman Jerome Powell over Business shutdowns could easily cause the US economy to crash by up to 30 per cent in the current quarter. He also commented that unemployment could peak at 25 per cent, to levels not seen since the Great Depression of the 1930s."
Considered as an attractive investment during political or economic turmoil, commodity experts have kept their outlook for the bullion metal better than expected.
The yellow metal that is seen as a hedge against inflation and currency debasement also saw gains in the commodity market on news the House of Representatives was set to vote on another $3 trillion coronavirus package that could be the opening bid in the next round of fiscal stimulus.
Expressing views on gold's technical outlook for near terms, Anuj Gupta (DVP-Commodities & Currencies Research, Angel Broking said, "Further, we expect gold may trade positive towards Rs 48, 200 to 48,300 levels. For intraday perspective, traders can buy gold around Rs 47,300 to 47,400 levels, with the stop-loss of Rs 46,900 levels and for the target of Rs 48,300 to Rs 48,400 levels. In the international Market, spot Gold can test $1780 to $1800 levels."