Gold prices today fall, down ₹5500 from record highs; silver rates drop2 min read . Updated: 28 Oct 2020, 09:19 AM IST
- Ebbing hopes of US stimulus before the elections and a stronger dollar weighted on gold prices
- ETF flows remained volatile as investors remained cautious ahead of the US elections
Gold and silver prices in Indian markets continued to struggle as the precious metals slipped in global markets. On MCX, December gold futures were down 0.2% to ₹50,860 per 10 gram while silver rates fell 0.5% to ₹61,978 per kg. In the previous session, on MCX, gold futures had ended flat while silver edged up 0.6%. MCX gold prices are in a consolidation range with lack of directive trades and a rise above ₹51,200 could boost prices higher, Geojit Financial Services said in note.
"If MCX silver holds the downside obstacle of ₹61,000, it could rise higher to ₹62,900 initially then to ₹63,400 region. But fall below ₹61,000 may squeeze down prices lower," the brokerage added.
In global markets, gold prices were marginally lower today amid ebbing hopes of US stimulus before the elections. A stronger US dollar also weighed on gold. Spot gold fell 0.1% to $1,905.51 per ounce while the dollar index was up 0.22% against rivals, making bullion expensive for those holding other currencies.
Among other precious metals, silver fell 1% to $24.30 per ounce while platinum was down 0.1% at $878.15.
ETF flows remained volatile as investors remained cautious ahead of the US elections. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, rose 0.23% to 1,266.72 tonnes on Tuesday.
Equities markets were under pressure today as concerns lingered about the impact of the worsening pandemic on economic activity in some parts of the world. Analysts said the new wave of virus infections and lingering uncertainty over the US vote would mean equities face a wobbly few days.
"However, supporting gold price is safe haven buying amid increasing challenges to global economy amid rising virus cases which has forced countries to impose more restrictions threatening the nascent economic recovery," Kotak Securities said in a note.
After hitting a record high of ₹56,200 in August, gold prices in India have lost momentum, tracking a global trend. Gold prices in India include 12.5% import duty and 3% GST.
Gold investors are also keeping an eye on EU-UK trade talks. Brexit negotiating teams have started intense daily talks, and these are likely to continue as both sides push to finalize a deal by the middle of November. Also, Bank of Japan and the European Central Bank have monetary policy decisions tomorrow while first reading of U.S. third-quarter GDP Thursday is also due.
"Gold may continue to witness choppy trade as uncertainty relating to US stimulus may keep US dollar and US equity markets directionless. We however maintain buy on dips view as increasing global economic challenges may increase gold’s safe haven appeal," Kotak Securities added. (With Agency Inputs)
(With Agency Inputs)