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Gold price surged 8.18% in the domestic market in April owing to the weakened US dollar, rising COVID-19 cases, and a deep plunge in cryptocurrencies MoneyControl.com reports.
The precious yellow metal regained its ground after Bitcoin slumped below $50,000, down over 9% after reports indicate that Washington is planning to raise capital gains tax.
Smart Money
Analysts believe the cryptocurrency has attracted investors’ attention and emerged as an inflation hedge, and a lot of smart money moved to Bitcoin as a safe-haven asset. However, Bitcoin dipped 23.46% from the high of $64,778 it had touched on April 14.
In comparison, the precious yellow metal had its fair shares of lows last year because of the pandemic. Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund was unchanged for the third day at 1,012.7 tonnes. Spot gold jumped by $10.73 to $1,794.72 an ounce at 1239 GMT in London trading.
Concerns over the fiscal impact of the second wave of COVID-19 infections
Hareesh V, Research Head, Commodities at Geojit Financial Services, told Money Control that concerns over the fiscal impact of the second wave of COVID-19 infections also helped gain momentum. “However, signs of economic recovery in key economies are likely to dent major gains in the commodity,” he said.
Navneet Damani, Vice President, Motilal Oswal, said market participants would keep an eye on the preliminary Manufacturing and Service PMI data expected from major economies.
“The broader range on COMEX could be between $1772 and $1805, and on the domestic front, prices could hover in the range of Rs 47,500 – 48,250,” he added.
And Ravindra Rao, VP-Head Commodity Research at Kotak Securities, said COMEX gold trades higher near $1792/oz. “Supporting the gold price is raising virus cases, choppiness in the equity market amid concerns about the US corporate tax and ECB’s emphasis on continuing with loose monetary policy,” he said.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
