Gold prices rise above Rs 49,000; here's why

NEW DELHI: Gold and silver futures prices in the domestic market gained on Tuesday as the US lawmakers indicated towards an economic stimulus that may come as soon as this week, making bullion attractive.

Leaders of both parties in the US appeared more upbeat over a pandemic relief aid bill likely to be attached to a critical spending measure that must be passed by Friday to avert a government shutdown.

Gold tends to benefit from stimulus measures as it raises the prospect of inflation which bullion is used to hedge against.


Gold futures on MCX were up 0.21 per cent or Rs 105 at Rs 49,044 per 10 grams. Silver futures added 0.25 per cent or Rs 159 to Rs 63,630 per kg.

In the spot market, gold prices tanked Rs 460 to Rs 48,371 per 10 gram in the national capital on Monday on a weak global trend, according to HDFC Securities. Silver prices also dipped Rs 629 to Rs 62,469 per kilogram.

Globally, gold prices were little changed on Tuesday as investors took stock of surging Covid-19 cases, vaccines inoculations and negotiations over a U.S. coronavirus fiscal relief package.

Spot gold was steady at $1,826.68 per ounce by 0118 GMT, while US gold futures eased 0.1 per cent to $1,829.70.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.4 per cent to 1,171.32 tonnes on Monday.

Silver rose 0.2 per cent to $23.87 an ounce. Platinum fell 0.1 per cent to $1,006.54 and palladium gained 0.2 per cent to $2,296.98.