The prices of gold and silver fell in Indian markets today, following the drop in world rates. On MCX, gold futures fell 0.5% to ₹50 803 per 10 grams. On gold, silver futures also fell 0.6% to ₹67,850 per kg.
In the previous session, gold futures were up 0.7%, breaking a three-day losing trend, while silver futures jumped 1.6%. Gold and Silver corrected sharply from last month’s highs. Gold is falling ₹5,000 per 10 grams from August highs while silver remains around ₹10,000 by 10 grams less.
In global markets, gold prices fell today, hurt by a strong US dollar, although the surge in coronavirus cases across the world has capped losses. Spot gold fell 0.2% to $ 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 a foothold today after last week’s collapse in US tech stocks.
Supporting gold at lower levels leads to an increase in coronavirus cases around the world and increased tensions between the United States and China, analysts say.
According to reports, the Trump administration could impose sanctions on China’s biggest chipmaker, the SMIC, a move that raises the possibility of retaliatory action by China.
On the other hand, directionless and volatile gold trading has pushed investors aside with gold holdings with SPDR ETF, the world‘s largest gold-backed exchange-traded fund, remaining stable. , said Kotak Securities.
Consumer demand also remains weak in key markets such as India and China, analysts said.
“Gold could witness volatile trade as the US dollar and US stock market struggle for direction,” Kotak said, recommending downside buys amid persistent challenges in the global economy. .
Gold tends to benefit from widespread central bank stimulus as it is widely viewed as a hedge against inflation and currency degradation. (With contributions from the agency)