Gold and silver prices today moved lower in Indian markets, tracking softer global rates as chances of a US stimulus package being rolled out before the November elections faded. On MCX, December gold futures declined 0.4% to ₹50,360 per 10 gram as the precious metals fell for the second day in three days. On the other hand, December silver futures fell 0.9% to ₹61,064 per kg. In the previous session, gold had edged up 0.5% while silver had jumped 1.6%.
In global markets, gold prices fell today as a steady US dollar also weighed on gold. Spot gold fell 0.4% to $1,893.17 per ounce.
The dollar index edged higher to 93.435, drawing support from rising coronavirus cases and scant progress towards the US stimulus deal. US Treasury Secretary Steven Mnuchin said getting a fiscal stimulus deal before next month’s election would be difficult, which weighed on global equities.
Among other precious metals, silver fell 1% to $24.05 per ounce while platinum eased 0.3% to $854.59 per ounce.
Fading hopes of an immediate US economic stimulus package and a recovery in dollar continue to dent gold prices but rising coronavirus pandemic worries and geo-political tension may boost the safe haven demand and thus the price of the commodity, said Hareesh V, head of commodity research at Geojit Financial Services.
Volatility in gold prices also pushed ETF investors to the sidelines, say analysts.
“Gold may continue to witness choppy trade until there is more clarity on US stimulus. However we maintain buy on dips view as concerns about health of US economy may keep check on US dollar while increasing virus risks may increase safe haven appeal for the metal,” Kotak Securities said in a note.
Gold investors also kept an eye on the U.S. presidential campaign, with polls showing Democratic candidate Joe Biden leading the race.
In Europe, France imposed fresh restriction in major cities and Germany warned of the economic risks of the pandemic, as Europe’s leaders intensified efforts to stem an unrelenting surge in coronavirus cases.
Gold, considered a hedge against inflation and currency debasement, has climbed about 25% this year amid the unprecedented levels of global stimulus to ease the economic blow from the pandemic.
Meanwhile, Metals Focus, a consultancy, in its latest projection said that world’s mines will produce 3,368 tonnes of gold this year, down 4.6% from 2019 and the lowest in 5 years, according to Reuters. But high bullion prices will help to push up output by 8.8% to a record 3,664 tonnes in 2021. (With Agency Inputs)
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