Gold & Silver

Omicron Covid variant fears increase haven appeal for gold, silver as bullion gains in opening trade

Rutam V Vora | | | Updated on: Nov 29, 2021
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Gold increased ₹115, silver opens up by ₹618 higher for MCX December Futures

Gold Futures opened with gains of ₹115 on Monday, making further advances amidst global concerns on the new coronavirus variant.

On the first day of the week, MCX Gold December Futures last quoted at Rs 47,669 per 10 grams after hitting a high of ₹47,785 in the opening trades.

MCX silver December Futures gained by ₹ 618 in the opening from the previous close of ₹ 62,045 per kg. After hitting an intra-day high of ₹62,770, silver was last quoted at ₹62,480 on Monday, up by 0.7 per cent from the previous closing.

Positive opening in precious metals comes on the back of global fears about Omicron (B.1.1.529 variant of Coronavirus) that promoted several countries, including India, to adopt preventive measures. The WHO has termed the latest variant as "Variant of Concern" triggering sell-off in the equities markets as uncertainty looms.

Fast Four Bullion:

1. International Gold gains strength

CME gold December Futures gained by 0.5 per cent or $9 to last quote at $1794.8 an oz (oz is equal to approx 28.3 grams) on November 28. Gold had a volatile week as multiple factors weighed on the gold price movement. While the US Federal Reserve's likely push for an accelerated withdrawal of stimulus to address inflation concerns put downward pressure on international gold, factors such as Chinese economic uncertainties and emergence of a new variant in South Africa threatening the world with a likely return of lockdowns and stringent restrictions gave crucial support to the yellow metal. Gold futures moved from $1,777 on November 24 to hit an intraday high of $1816 on November 26. Analysts expect the renewed haven demand for bullion will keep gold firm in the near future.

2. Spot Gold inches up to weekly high

Spot gold prices in India tracked Futures and international markets, gaining strength to inch closer to make weekly-high levels. India Bullion and Jewellers Association (IBJA) quoted the gold (999 purity) at ₹48,466 per 10 grams for November 26, higher by about ₹800 over the previous settle. Silver prices quoted at ₹63,612 per kg, higher by about ₹300 over prior settle. Further strength is expected amidst weaker equities markets triggering a wave of uncertainties and prompting investors to rush for gold. Also, analysts observed that physical gold demand had picked up in major Asian hubs last week, helped by a retreat in prices seen in the past couple of weeks. In India, a likely spurt in demand is expected owing the wedding season.

3. Volatility in Precious metals

International gold prices moved in a broad territory of $1,879.5 to $1,777.4 for CME December Futures in past fortnight giving a spread of over $102.

India gold futures moved in the range of ₹49,298 to ₹47,421 giving a spread of ₹1877.

Similarly, CME Silver Futures was last quoted at USD 23.405 an oz, up 1.29% from the previous settle. Silver Futures moved in the broad range of USD 25.49 and USD 22.915, giving a spread of USD 2.575 for the metal.

India Silver futures moved in the range of ₹66,563 and ₹62,045, with a spread of ₹4,518 a kg.

Analysts expect volatility to remain prevalent in the precious metals as the global uncertainty looms following the new coronavirus variant.

4. Outlook.

The precious metals are likely to stay firm as equity markets witnessed a panic sell-off for past two trading sessions. Analysts expect gold getting a major support at ₹ 47,100 levels, with much room in the upside amidst global uncertainties. After heavy volatility in silver, prices may see resistance around at ₹64,022, but once the level is breached, experts believe the prices may touch ₹65,080.

Published on November 29, 2021

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