After over 25% gains in 2020, gold prices in India are down over 2% so far this year
In the previous session, gold had hit the lowest level in over a month
Gold and silver prices were mixed today in Indian markets, tracking flat global rates. On MCX, gold futures dipped 0.1% to ₹48,846 per 10 gram while silver gained 0.5% to ₹65,760 per kg. In the previous session, gold had finished 0.36% higher, after hitting the lowest level in over a month, while silver had advanced 1%. In global markets, gold rates today inched higher as traders awaited comments from Treasury Secretary nominee Janet Yellen on the dollar and stimulus.
Spot gold rose 0.1% to $1,838.51 per ounce after prices dipped to over one-month low in the previous session.
US Treasury Secretary nominee Janet Yellen will testify today on Capitol Hill a day ahead of Joe Biden’s inauguration as president. Last week, Biden had outlined a $1.9 trillion stimulus package proposal to jump-start the virus-stricken economy.
Among other precious metals, silver fell 1.1% to $25.05 an ounce, platinum rose 1.3% to $1,092.65, while palladium shed 0.3% to $2,364.
"Hopes of further economic stimulus measures from the new US administration and increasing virus cases continue to offer support to gold prices. Meanwhile, strengthening of US dollar and firm global equities are likely to limit sharp gains in prices," says Hareesh V, Research Head Commodities at Geojit Financial Services.
As long as prices hold the support of $1800, he says, "we can expect a recovery pullback in prices. However, it required to break $1870 to strengthen the momentum. The immediate downside turnaround point is seen at $1780."
After a stellar gain in 2020, gold rates have fallen more than 3% this year in global markets as US Treasury yields and the US dollar have inched higher on expectations that coronavirus vaccines and stimulus packages will aid the economic recovery. In August, gold had hit a record high of ₹56,200 in Indian markets.
The dollar index was slightly lower at 90.672 today after climbing over the past two weeks.
"The US dollar slumped to April 2018 lately but has seen some relief rally in last few days as market players assess policy changes in US. President elect Joe Biden last week unveiled a $1.9 trillion stimulus package proposal designed to jump-start the economy and speed up the US response to the coronavirus pandemic. While stimulus measures will help boost economic growth, market players are concerned if the measures will be approved by the US Congress or not. Additionally, market players are also concerned how the stimulus package will be funded," Kotak Securities said in a note.
Analysts however say that gold remains supported by rising virus cases globally which has forced authorities to impose stricter restrictions in many parts of the world. Mixed economic data from major economies also highlights uneven pace of recovery. Gold is still holding above $1800/ounce level while silver is trading above $24/ounce.
"With just few days into the year 2021, volatility has set in financial markets as is evident from the mixed trade in asset classes. Last week we saw equites and commodities coming under pressure while US dollar edged up as market players geared up for policy changes in US as Joe Biden is set to take office as the US President," Kotak Securities said.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Never miss a story! Stay connected and informed with Mint.
our App Now!!