Gold prices today drop, down ₹5,500 from record highs; silver rates slip2 min read . Updated: 16 Oct 2020, 09:07 AM IST
- Analysts say that concerns over uneven global economic recovery will support gold at lower levels
- The latest tranche of sovereign gold bonds closes for subscription today
Gold and silver prices in India struggled for direction amid muted global rates. On MCX, December gold futures were down ₹50,653 per 10 gram while silver futures edged slightly lower to ₹61,512 per kg. Gold and silver prices in India have been volatile this week. In the previous session, gold prices edged up 0.3% while silver rates fell 0.3%. In August gold had hit a record high of ₹56,200 per 10 gram while silver had inched closer to ₹80,000 per kg.
In global markets, gold prices remained muted today amid a firm US dollar and uncertainty over US stimulus package. Spot gold fell 0.1% to $1,906.39 per ounce and it is down over 1% so far this week. Among other precious metals, silver fell 0.2% to $24.26 per ounce, while platinum rose 0.2% to $866.05.
President Donald Trump said he is willing to go beyond the $1.8 trillion offer for relief that’s already been put forward, but Senate Majority Leader Mitch McConnell rejected that.
Gold has been trading in a narrow range this month amid uncertainty surrounding the prospects of a US stimulus deal being passed before the November 3 presidential election.
ETF investors stayed on the sidelines as gold remained directionless. Holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.15% to 1,276.06 tonnes on Thursday.
Gold investors are also monitoring clampdowns in Europe’s biggest cities aimed at containing the virus’s spread. Investors fear fresh restrictions could cause more damage to a fragile global recovery. Data released on Thursday showed an unexpected surge in US jobless claims to the highest since August, stoking fears the pandemic was inflicting lasting damage to the labour market.
Analysts say that concerns over uneven global economic recovery will lend support to gold at lower levels. "While US dollar is seen as the preferred safe haven asset, increasing challenges to global economy is supportive for gold as well," Kotak Securities analysts said in a note.
"Gold may witness choppy trade as market players continue to assess development relating to US stimulus, Brexit and rising virus cases however we expect buying interest to emerge at lower levels as uncertainty about US economy may limit upside in US dollar," they added.
Back in India, the latest tranche of sovereign gold bonds will close for subscription today. The issue price has been fixed at ₹5,051 per gram of gold. Investors who apply online and make payment against the application through digital mode get a discount of ₹50 per gram.