Gold breaches `50,000 on MCX, `51K in Delhi spot

Gold prices on the Multi Commodity Exchange have breached Rs 50,000 mark, touching a new record high even as gold in the Delhi spot market moved up above Rs

51,000. Silver made an eight-year high of Rs

62,200 in the futures market as the international rates continued their bull-run amidst a weakening US dollar.

In the domestic futures market, gold made a fresh high of Rs 50,085 per 10 gm and in the Delhi spot market, 24 carat gold was trading at Rs 51,650, gaining more than Rs 1,700 from the previous close.

While silver went above Rs 62,000 in the futures market, it was trading at a discount at Rs 60,700 per kg in the spot market.

Both gold and silver have been moving up for the past several sessions as bullion continued its bull-run in the international market.

On Wednesday, gold was seen touching $1,861 per ounce, a level last seen in 2012. Silver at $23 an ounce too was trading at eight-year high levels. Bullion has been gaining from the weakness of the US dollar, with which it has an inverse correlation. The dollar index was seen at a three-month low of 95 and has seen weakening for the past one week, said Ajay Kedia, MD, Kedia Commodities.

The new stimulus announced by the European Union has raised concerns about economic risks and fuelled anticipation of similar stimulus in the US.

“US lawmakers could soon agree on a new stimulus package, as extended unemployment aid for millions of Americans will expire at month-end. Republicans are in talks to provide additional $1 trillion, Democrats are talking of even a bigger one close to $3 trillion,” said Sriram Iyer, senior research analyst at Reliance Securities.

Prices also found support amidst escalation of tensions between the US and China. Besides, Covid-related uncertainties have not eased yet.

Analysts say though the fundamentals are still strong for the bullion, technical correction can create volatility.

“Inves-tors have to be cautious at this time as there could be corrections due to profit-booking. Gold has the potential to move towards

$1,880 and to all-time high of $1,920 in the future. In the Indian market, depending upon the trajectory of rupee, gold can move up to Rs 54,00055,000 levels,” said Kedia.