Gold and silver prices in India continued their decline today, extending the losses to the fourth day. On MCX, October gold futures fell 0.45% to ₹49,293 for 10 grams, while silver futures lost 3% ₹56,710 per kg. In four days the gold has lost ₹2,500 for 10 grams so far. In the previous session, gold had plummeted 1.9% or ₹950 while silver had plummeted 4.5% or ₹2,700 per kg.
In global markets, gold prices continued their downward movement today, falling to a low of more than two months. Investors remained cautious ahead of US jobless claims data to be released later in the day, as a robust dollar weighed on the precious metal.
Spot gold fell 0.3% to $ 1,858.08 an ounce. The dollar index held firm near an eight-week high against rival currencies amid signs of an economic slowdown in Europe. A stronger US dollar makes bullion more expensive for holders of other currencies. Eurozone economic activity stalled in September as the summer recovery faltered due to the resurgence of the coronavirus spread.
Among other precious metals, silver fell 2.8% to a nearly two-month low of $ 22.23 an ounce.
The unprecedented global stimulus, negative real rates and a weakening dollar pushed gold to a record above $ 2,075 an ounce in early August.
“The weight of the gold price is the persistent strength in the US dollar index, which has tested the highest since late July. The US dollar has risen amid growing concerns about the health of European economies amid increased virus cases, mixed economic data and Brexit uncertainty, “Kotak Valores said in a note.
“The US dollar has also risen as the Fed continues to emphasize the need for additional fiscal stimulus, indicating that monetary measures are not being considered,” the brokerage added.
Gold ETF investors have also stayed on the sidelines amid the sharp drop in prices. Shares in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.87% to 1,267.14 tonnes on Wednesday.
“While the strength of the US dollar has put pressure on gold prices, the increased spread of the coronavirus and global economic concerns have increased the attractiveness of gold as a safe haven. The sharp drop in gold this week has affected market sentiment. And while positives persist, a sustained increase may not occur until there is a large correction in US dollars, “Kotak Securities said, recommending buying at lower levels. (With contributions from the agency)
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