Gold prices today fall on vaccine optimism, silver rates edge lower2 min read . Updated: 23 Nov 2020, 04:27 PM IST
- Optimism about covid vaccine has dented gold prices over past two weeks
- But a weaker US dollar and hopes of more US stimulus cushioned gold's fall
Gold and silver prices dipped today in Indian markets as fresh optimism over covid vaccine dented the safe-haven appeal of gold. On MCX, gold futures slid 0.2% to ₹50095 per 10 gram while silver futures edged 1% lower to ₹61479 per kg. In the previous session, gold had finished 0.54% higher while silver had risen 1.2%. But on a weekly basis, gold had dropped ₹700 per 10 gram, its second straight weekly loss as optimism about covid vaccines hurt the safe haven appeal of gold. In August, gold had hit a record high of ₹56,200 per 10 gram.
In global markets, gold eased today after Britain's AstraZeneca said its Oxford covid vaccine could be around 90% effective without any serious side effects, bolstering appetite for riskier assets and overshadowing support for bullion from a weaker dollar. Spot gold edged 0.1% lower to $1,868.26 per ounce. Silver fell 0.3% to $24.07 an ounce, while platinum rose 0.4% to $949.31.
"Gold has come under pressure after failing to break past the $1900/oz level. But price has so far managed to hold above the key $1850/ounce level. Gold is pressurized by progress on vaccine for COVID-19 even while there is uncertainty as to how soon a vaccine will become available. A number of companies have reported progress in vaccine trials," Kotak Securities said in a recent note.
"However, supporting gold price is rising virus cases in US and Europe which has forced authorities to impose tighter restrictions hampering economic activity. Rising virus cases, uneven economic recovery and comments from central bank officials has added to market expectations that more stimulus measures may be taken. Gold continues to remain in the broad range of $1850-1900/oz amid mixed factor and this may continue unless there are fresh triggers. However, with rising virus risks and hopes of continuing stimulus measures, we expect buying interest to emerge at lower levels," the brokerage added.
On Friday, a slight uptick was seen in ETF flows. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, rose 0.24% to 1,220.17 tonnes.
Despite coronavirus cases and deaths still surging in many parts of the world, global risk sentiment has been buoyed by hopes that trial successes of covid vaccines can help an effective rollout of shots across the world. A top US official on Sunday said that healthcare workers and others recommended for the nation's first COVID-19 inoculations could start getting shots within a day or two of regulatory consent next month.
Hopes of hopes of further U.S. stimulus aimed at cushioning the economic blow from the COVID-19 pandemic also helped support gold prices. US Treasury Secretary Steven Mnuchin on Friday signalled that negotiations on stimulus measures would continue, even as he defended his decision to end several of the Federal Reserve's pandemic lending programs on December 31.
Gold traders will be looking ahead to the minutes of the most recent Federal Open Market Committee meeting, due on Wednesday. Also, US jobless claims, GDP and personal spending data is due on Wednesday. (With Agency Inputs)