Gold prices jumped in India today while silver surged, supported by a drop in dollar index. On MCX, gold prices rose 0.9% to near nine-month high of ₹54,745 per 10 gram while silver surged 2.3% to ₹69,065 per kg. The dollar index today dropped to 103.66 after the Bank of Japan’s surprise policy tweak. The yen strengthened as the Bank of Japan said it would let benchmark bond yields rise further. Spot gold rose 1.1% to $1,806.34 per ounce while spot silver rose 3.3% to $23.71 per ounce.
Global equity markets have been seeing second round of selling in response to the last week’s hawkish US Fed policy. Reports of growing disruptions from Covid outbreaks in China also weighed on investor sentiment. The S&P 500 had closed at its lowest level in more than a month on Monday.
“Gold prices found strong support at $1770 in last two sessions, and raced higher beyond $1805 in Comex helping MCX gold scale beyond ₹54800 on Tuesday afternoon, since dollar index fell below 103.75 post. Prices react positively to fear of recession as risky market under-performed and safe-heaven buying was witnessed. Gold range can be seen ₹54250-55250 in MCX going ahead,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Meanwhile in India, the issue price for the next tranche of Sovereign Gold Bond Scheme 2022-23, which will open for subscription for five days from Monday, has been fixed at ₹5,409 per gram of gold. The Sovereign Gold Bond Scheme 2022-23 – Series III will be open for subscription from December 19–23, 2022
“The nominal value of the bond…works out to ₹5,409 per gram of gold,” the RBI said.
“The price for the third tranche of SGB (2022-23) is fixed at ₹5409/gm. The primary aim behind issuing these bonds is to make them a substitute for investing in physical gold. Meeting demand for physical gold leads to imports, putting pressure on the currency. SGB is an effective alternative to physical gold, it a paper gold. Any investor can invest in gold, without any hassles of storage or related cost, liquidating it is easier than physical gold and the bonus is a 2.5% interest coupon payable semi-annually. The same is not available in physical gold,” said Nish Bhatt, Founder & CEO.
“The RBI has received a good response from the SGB, it has raised a total of over ₹31,000 crore since its inception in November 2015 as per its annual report. Gold prices have risen over 11% this year, and more than doubled since November 2015.”
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