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Gold rates jumps to near 4-month high, silver sees a rise too

By Saima Siddiqui 
Updated Date

New Delhi: Both the precious metals – Gold and silver – witnessed a price hike on May 24, edging higher in Indian markets. On MCX, gold price rose 0.24% to near four-month high of ₹48519 while silver rates jumped 0.5% to ₹71,440 per kg.

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In the previous session gold had declined 0.22% while silver had slumped 1.7%. In international markets, gold inched higher to near 4-month high as a slide in cryptocurrencies further lifted the safe-haven metal’s appeal.

The precious metal was also supported by a weaker US dollar and expectations of growing inflationary pressure. Spot gold was up 0.2% at $1,883.21 per ounce. Among other precious metals, silver gained 0.4% to $27.64 while platinum climbed 0.6% to $1,173.03.

Inflows into gold-backed exchange-traded fund or gold ETF also supported the precious metal. The holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose 0.6% to 1042.92 tonnes on Friday.

Amid China’s efforts to efforts to crack down on bitcoin mining and trading, the cryptocurrency fell sharply over the weekend. It is now down nearly 50% from the year’s high.

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Back in India, the second tranche of sovereign gold bonds for this fiscal opened for subscription today. The Reserve Bank of India has fixed issue price at ₹4,842 per gram. The government has decided to issue the bonds in six tranches from May 2021 to September 2021.

Investors who apply online and make payment online get a discount of ₹50 per 10 gram. For such investors, the issue price of gold bond will be ₹4,792 per gram of gold.

“The price for the second tranche of Sovereign Gold Bond has been fixed at ₹4842/gram. Based on their risk profile investors should look at allocating 5-15% of their capital to gold. Sovereign Gold Bond is a better alternative to physical gold as there is no risk of theft, storage charge, and to top it up it comes with an interest-bearing coupon,” said Nish Bhatt, Founder & CEO, Millwood Kane International – an Investment consulting firm.

“Gold prices have been on an up move due to uncertainties created by the second wave of COVID-19 cases, concerns of rising inflation in the US, and a weaker US dollar. Gold prices have been trading near a 4-month high in the international market. The high volatility in cryptocurrencies has led to investors flocking back to gold for stability,” he added.

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