Gold and silver prices in India fell dramatically today, extending the losses to the third day. On MCX, October gold futures fell 1.2% to ₹49,764 per 10 grams, while silver futures fell 4% to ₹58,851 per kg. Precious metal prices have fallen dramatically this week around the world as investors sought the safety of the US dollar. Gold prices fell ₹100 in the previous session, extending Monday ₹1,200 drop. Silver was also down on Tuesday, adding to Monday’s. ₹6,000 losses.
Compared to last month’s highs of ₹56,200, gold is down more than ₹6,000 for 10 grams in India.
“The dream race for gold has hit an obstacle, after reaching highs of more than ₹56,000 / 10gm last month, the yellow metal has been falling. Internationally, Comex Gold is trading below the $ 1900 / oz level. The main reason for the fall in gold prices is the rebound in the dollar index, the uncertainty about the next stimulus package from the US government to help drive the slowdown in the growth rate. The dollar index is close to an 8-week high against the other currencies in the basket, “said Nish Bhatt, founder and CEO of Millwood Kane International on falling gold. ₹50,000 / 10g.
On global markets, gold prices hit a six-week low today as the dollar strengthened with the coronavirus crisis that shook sentiment in Europe, while investors wary of further stimulus from the US Federal Reserve. Spot gold fell 1% to $ 1,880.46 an ounce.
Silver fell 4.8% to $ 23.25 an ounce, after hitting a nearly two-month low of $ 23.04 earlier in the session.
The dollar index hit an eight-week high, fueled by upbeat U.S. home sales data and concerns about a second wave of coronavirus infections in Europe.
The dollar index hit an eight-week high against other currencies. A firmer dollar makes gold more expensive for holders of other currencies.
Gold is considered a safe haven asset that benefits in times of economic and political uncertainty. But despite weaker risk sentiment, gold prices have trended lower this week as investors sought the safety of the US dollar and ditched commodities and stocks.
Analysts say that while the US dollar is considered the preferred asset today, gold may also benefit from safe-haven buying if global risks continue to escalate.
“We expect purchases to emerge at lower levels as concerns about the US economy may limit the rise of the US dollar,” Kotak Securities said in a note.
To control the spread of the coronavirus, the UK has imposed a new set of restrictions to deal with a second wave of COVID-19.
Investors stayed on the sidelines despite the recent price drop. ETF Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.05% to 1,278.23 tonnes on Tuesday. (With contributions from the agency)
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