Gold futures, spot rates rise as jewellers restock inventory

Gold futures rose in Wednesday morning trade while spot rates advanced slightly from yesterday as jewellers sought to restock inventory and investors sought safety amid geopolitical tension.

June contract gold rose 0.28% to Rs 28,972 per 10 gm on the MCX at 1145 am on Wednesday. Prices touched an intraday high of Rs 28,997 and a low of Rs 28,943.

In the spot market, gold was trading at Rs 30,070 per 10 gm compared with Rs 30,000-30,030 per 10 gm on Tuesday.

Gold is expected to be range-bound this week unless the Ukrainian crisis intensifies further, said Amit Sampat, director, Pushpak Bullions. He added that market demand was normal.

“Jewellers are in restocking mode as they have to fulfill Akshaya Tritiya orders,” said Sampat. Gold rose to a three-week high globally as investors weighed tension in Ukraine against signs of an improving global economy.

Bullion for immediate delivery gained as much as 0.4% to $1,313.66 an ounce, and traded at $1,312.02 at 1:42 pm in Singapore, according to Bloomberg generic pricing. Gold climbed to $1,315.68 on May 5, the highest since April 15.

Gold has rallied 9.2% this year even as the US Federal Reserve reduced monthly bond-buying, with the conflict between Russia and Ukraine increasing “safe-haven” demand. In China, the world’s largest consumer of the yellow metal, volumes for the benchmark gold spot contract in Shanghai climbed for a second day yesterday.

The crisis in Ukraine “means that there will be some safe-haven demand for gold and silver, so we expect that over the short term, it will have a positive effect,” Piet-Hein Ingen Housz, global head of metals at ABN Amro Bank NV, said in a Bloomberg Television interview. “However, if the economies in the US and Europe indeed do pick up, that will have a downward pressure on gold and silver in the longer term,” he said.

The US urged Ukraine to proceed with its May 25 presidential election, rejecting Russia’s calls to postpone the vote as the government in Kiev waged an offensive against separatists in the country’s east and south.