Gold and silver prices fell today in Indian markets, following declines in global rates. On MCX, gold futures fell 0.5% to ₹50,803 for 10 grams. Tracking gold, silver futures also fell 0.6% to ₹67,850 per kg.
In the previous session, gold futures had risen 0.7%, breaking a three-day losing trend, while silver futures had risen 1.6%. Both gold and silver have drastically corrected from last month’s highs. Gold is over ₹5,000 per 10 grams from the August highs, while silver remains roughly ₹10,000 for 10 grams less.
In global markets, gold prices fell today, affected by the strength of the US dollar, although the increase in coronavirus cases around the world limited losses. Spot gold was down 0.2% at $ 1,925.68 an ounce. The dollar index rose 0.45% against its rivals, making gold more expensive for holders of other currencies.
Asian stock markets tried to regain some balance today after the collapse of US tech stocks last week.
Support for gold at lower levels is increasing coronavirus cases globally and has increased tensions between the United States and China, analysts say.
News reports said the Trump administration may impose sanctions on China’s largest chipmaker, SMIC, a move that raises the possibility of retaliation by China.
On the other hand, volatile and directionless trading in gold has pushed investors to the sidelines with gold holdings with SPDR ETFs, the world’s largest gold-backed exchange-traded fund, which is holding steady, Kotak Securities said. .
Consumer demand also remains weak in key markets like India and China, analysts say.
“Gold may witness choppy trading as the US dollar and the US equity market battle for direction,” said Kotak, recommending falling buying amid lingering challenges to the global economy.
Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency degradation. (With contributions from the agency)
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