1 min read.Updated: 28 Jun 2021, 09:39 AM ISTLivemint
Retail gold demand in India remained weak despite price correction in the precious metal
Gold rates are down about ₹10,000 from last year's highs
Gold prices struggled in India today amid weak global cues. On MCX, gold futures were flat near 2-month low of ₹46,970 per 10 gram while silver rates edged up 0.26% to ₹68,049 per kg. Despite the price dip, retail gold demand in India remained weak the previous week, Reuters reported, adding that dealers offered discounts of up to $12 an ounce, the highest since mid-September 2020.
Gold prices in India include 10.75% import duty and 3% GST. Gold rates in India are down about ₹10,000 from last year's highs.
In global markets, gold rates slipped to one-week low amid a stronger US dollar. Spot gold was down 0.2% to $1,777 per ounce, after hitting one-week low of $1,770 earlier in the session. On Friday, gold rose as much as 0.8% after US personal consumption expenditures price index, the Fed's preferred inflation measure, came in below expectations.
The precious metal came under pressure today as dollar index rebounded from Friday's lows. The dollar index was steady at 91.847, making gold expensive for holders of other currencies.
Analysts say gold is in a sideways trend in the short term and could see a direction if it breaks out of the $1,760-$1800 range.
Gold traders are watching negotiations over an US infrastructure deal.
Among other precious metals, silver was steady at $26.07 per ounce while platinum eased 0.7% to $1,103.40.
"Gold may witness choppy trade reflecting choppiness in equity market and US dollar. However, the general bias remains on the downside owing as US dollar may remain supported by US economic optimism and Fed’s hawkish stance," Kotak Securities said in a note.
While Fed uncertainty has kept gold prices choppy, ETF flows have remained mixed, showing weaker investor interest, says the brokerage.
"Amid other factors, gold remains underpinned by persisting virus risks, uneven recovery, increasing inflation concerns and US-China tensions. However, weighing on price is improving outlook for US economy as US President Biden stated that he has reached a preliminary agreement with a bipartisan group of senators on a infrastructure plan," Kotak Securities added.
(With Agency Inputs)
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