India Gold August Futures in the commodity market rallied to a fresh high of Rs 48,420 on Monday, tracking global cues amid concerns of the global economic recovery due to the resurgence of COVID-19 cases worldwide.
Significant rise in coronavirus cases in India after weeks of lockdown also kept demand for the risk-averse asset high in the domestic market.
On Multi Commodity Exchange, gold futures for August hit a fresh high of 48,420 per 10 gm, also its day's high, after opening at Rs 48,333. The precious metal had earlier closed at Rs 48,232 per 10 gm.
Overseas, gold price moved to the highest level since March 2012 as dollar lost ground amid more stimuli from central banks to support economies. In the international market, gold prices touched the eight-year high of $1773 per ounce. Concerns of a resurgence of coronavirus in China and US encouraged investors to buy the yellow metal, experts said. Spot gold rose 0.7% to $1,754.74 per ounce, while US gold futures rose 1.1% to $1,771.40.
Meanwhile, gold-backed loans are becoming more popular with banks. Indians have been using gold to secure loans as banks are otherwise increasingly unwilling to lend due to fear of the loans going bad.
Considered as an attractive investment during economic turmoil, commodity experts have kept their outlook for the bullion metal better than expected. Experts said international gold prices continued their upward ride and are looking at a breakout move shortly as fear of the second wave of a pandemic could lead to lockdown again.
Commenting on Gold's outlook, Anuj Gupta (DVP-Commodities & Currencies Research, Angel Broking) said, "Safe heaven demand, investment demand due to Coronavirus pandemic and weakness in major economies boosted demand for gold."
"We expect gold will trade higher further. It may test $1,800 to $1,830 levels soon. For traders, it is recommended to buy gold at 48,000 to 48,100 levels, with the stop loss of 47,700, for the target of 48,600 to 48,800 levels, " he added.