The prices of gold and silver fell slightly in the Indian markets today. On MCX, gold futures slipped 0.4% to ₹51,140 per 10 grams – fourth drop in five days. MCX silver futures fell 0.75% to ₹67,982 per kg. In the previous session, gold futures rose 0.6% while silver gained 0.55%. Gold prices have been volatile since reaching record highs of ₹56,200 last month. From these levels gold is now down by about ₹5,000. Silver also saw a sharp correction after moving closer to ₹80,000 per kg last month.
MCX, India’s largest commodity derivatives exchange, said it has witnessed a record delivery of silver contracts through the exchange. A total of 139,965 tons of silver, worth ₹937 crore, was delivered in MCX silver contracts expiring August / September, the exchange said.
In global markets, gold rates remained stable today as the strength of the US dollar offset the increased appeal of safe-havens from weak global equities. Spot gold was little changed at $ 1,929.30 an ounce, after falling near a two-week low of $ 1,906.24 in the previous session.
Among other precious metals, silver was down 0.2% to $ 26.66 an ounce while platinum was flat at $ 901.29.
The US dollar hit a nearly one-month high against a basket of six other currencies, with the pound falling to a six-week low amid renewed concerns over Brexit. The US dollar was also boosted against a backdrop of declining risk appetite. A stronger greenback makes gold more expensive for holders of other currencies.
In contrast, overnight, Wall Street sank for the third day in a row.
“Weighing in on the price of gold are gains in the US dollar index, weak ETF activity and declining consumer demand. The pound is under pressure amid news increasing cases of viruses and growing uncertainty regarding negotiations on post-Brexit conditions, ”Kotak Securities said in a note.
“Cases of the virus around the world continue to rise, with India reaching second in the tally and new cases reported in parts of Europe. Tensions between the United States and China have escalated further as President Donald Trump has said he intends to reduce the United States’ economic relationship with China. Supporting gold is the Fed’s dovish stance and mixed economic data which has kept bond yields low, ”the broker said.
“We expect buying interest in gold to emerge at lower levels as growing challenges for the global economy could enhance its appeal to safe haven,” he added.
Gold investors await the monetary policy strategy of the European Central Bank policy meeting, scheduled for Thursday. The next meeting of the US Federal Reserve is scheduled for next week. (With contributions from the agency)