Gold prices in India are down sharply after hitting record highs last week
Silver has suffered more losses as broad improvement in global risk appetite has hurt prices of precious metals
Gold and silver prices today fell further in India, extending their recent decline. Subdued global prices and an appreciation in rupee's value against the US dollar put pressure on domestic gold and silver prices. On MCX, October gold futures prices today traded 0.20% lower at around ₹37,650 per 10 gram, down ₹2,200 from last week's highs of ₹39,885. Silver has suffered more losses. Silver futures on MCX today fell 0.2% to ₹47,047 per kg. Silver prices are now down about 8% from last week's high of ₹51,489.
In global markets, gold prices remained subdued at $1,499 an ounce while silver fell to to $18.08 per ounce. A broad improvement in risk appetite, which has pushed global equity markets higher, has put pressure on gold prices. Globally, gold prices are down about over 4% from $1,550 levels earlier this month. Global stock markets have rallied in recent days after gestures by US and China have stoked cautious optimism among investors that the next round of trade talks in October between Washington and Beijing may lead to some progress.
Kotak Securities analysts however expects gold prices to remain supported, saying that "global growth worries and trade concerns are far from over."
The ECB's aggressive move, which included a renewal of $20 billion euros in monthly bond-buying that will continue indefinitely, will add further pressure on the Federal Reserve to cut interest rates when it meets next week. Lower interest rates boost increase the appeal of non-interest yielding assets like gold.
Back in India, the correction in gold prices is expected to lift jewellery demand, which remain subdued due to sharp jump in rates this year. In another development, the government is expected to approve a proposal to make BIS hallmarking mandatory for gold jewellery before Diwali, Press Trust of India reported. The hallmarking of gold, which is voluntary in nature at present, is a purity certification of the precious metal. (With Agency Inputs)
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