Gold prices today drop in Indian markets, silver rates edge lower2 min read . Updated: 03 Nov 2020, 09:40 AM IST
- Gold investors remained cautious ahead of the US presidential elections
- On gold traders watch also will be the outcome of Fed meeting due later this week
Gold and silver prices edged lower in Indian markets ahead of US election. On MCX, gold futures were down 0.22% to ₹50,953 per 10 gram while silver edged lower to ₹61,942 per kg. Both gold and silver had risen in the previous session. In global markets, gold prices were steady today after a sharp rise in the previous session. Spot gold was little changed at $1,892.51 per ounce as investors remained cautious ahead of the US presidential elections.
Gold was also supported by a softer dollar. The dollar index dipped 0.14% against a basket of currencies, having hit a one-month high on Monday.
In the previous session, gold prices had risen about 1%. Among other precious metals, silver fell 0.3% to $23.97 an ounce while platinum dropped 0.3% to $856.04 and palladium gained 0.2% to $2,216.45.
Polls continue to show Democratic nominee Joe Biden ahead, though battleground states remain tight. Investors are fretting about the possibility the outcome will be contested, which means a clear winner might not emerge for some time, weighing on market sentiment.
"All eyes set on the US election outcome. The second wave of Covid-19 has forced UK and France to call for another complete nation-wide lockdown. Traders will also closely monitor FOMC meet. Hence in the eventful week, gold may stay supported," said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
Gold is seen as a hedge against inflation and currency debasement and the precious metal has gained over 24% so far this year on unprecedented stimulus measures and expectations for inflation due to it.
"While it is usual to see increased volatility ahead of any major event, the upcoming US elections pose too many uncertainties. Market players are firstly worried whether there will be an outcome on November 3 itself or not. If the outcome is too close, either side could challenge the vote and while there are various ways to resolve the issue, a final decision may take days to come. There is also uncertainty whether President Trump will accept election result or not which could also delay a final result. Either scenario is not considered good for US economy as well as general market risk sentiment," Kotak Securities said in a note.
On gold traders watch will be the outcome of Fed meeting due later this week. The Federal Open Market Committee (FOMC) will begin its two-day meeting on interest rate policy on Wednesday. Policymakers are expected to reaffirm its commitment to support the pandemic-struck economy and keep interest rates unchanged.
ETF investors continued to remain on the sidelines ahead of the US election. Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, fell 0.14% to 1,255.92 tonnes on Monday from 1,257.67 tonnes on Friday. (With Agency Inputs)