Gold prices fall sharply today after new Brexit deal agreed1 min read . Updated: 17 Oct 2019, 04:01 PM IST
- Gold rates in India are down significantly from record highs hit last month
- Jewellers hope that the price correction will spur retail demand
Gold prices in India fell sharply today after European Union and UK reached a new Brexit deal. On MCX, gold futures prices fell 0.50% to ₹38,030 per 10 gram. Silver also edged lower on MCX, falling 0.26% to ₹45,110 per kg. Gold prices have remained choppy over the past few days in India in tandem with a similar global trend. Last month, they had hit a new high of ₹40,000 as global prices had hit a new six-year peak of above $1,550 an ounce.
In global markets, gold prices also were lower falling 0.40% to $1,488 per ounce, after the Brexit deal was announced. The deal still needs approval from parliament.
Data released on Wednesday showed US retail sales fell for the first time in seven months in September. A gauge of manufacturing activity released earlier this month showed it cooling to a more than 10-year low in September as trade tensions weighed on exports.
However, the weak set of data has increased expectations that the US Federal Reserve will cut interest rate at its meeting later this month. Investors awaited further news on the US-China trade front. Lower interest rates and economic uncertainty boost the appeal of safe-haven assets like gold.
US Treasury Secretary Steven Mnuchin on Wednesday said that US and China trade negotiators are working on nailing down a Phase 1 trade deal text for their presidents to sign next month. Last week US had announced the first phase of a deal to end a trade war with China and suspended a threatened tariff hike.
Holding of SPDR Gold Trust GLD, the world's largest gold-backed ETF, fell 0.16% to 918.19 tonnes on Wednesday, from 919.66 tonnes on Tuesday.
"Gold has been trading in a broad range as market players await more clarity on Brexit, US-China trade talks and Fed’s monetary policy. We expect choppy trade to continue as market players react to development relating to these issues however the general bias remains positive unless risk sentiment improves significantly," Kotak Securities said in a note.
Silver may witness choppy trade, says Kotak Securities, but expects buying interest to emerge at lower levels. (With Agency Inputs)
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