Gold prices today fall for 2nd day, down ₹7000 from record highs; silver drops2 min read . Updated: 15 Jan 2021, 01:09 PM IST
- Gold has struggled for more than a week amid rising US bond yields
- Analysts say gold rates may be choppy in near term
Gold prices fell for the second day in Indian markets with futures on MCX edging lower by 0.25% to ₹49100 per 10 gram. In the previous session, gold had declined 0.3%. Silver futures on MCX were also weak today, falling 1.6% to ₹65,609 per kg. Gold prices in India have struggled for more than a week, tracking global cues, as rising US bond yields that increase the opportunity cost of holding the precious metal.
In international markets, gold rates moved higher today after US President-elect Joe Biden unveiled a massive $1.9 trillion stimulus package proposal. The precious metal was also supported as US Federal Reserve Chair Jerome Powell maintained his commitment to keep monetary policy dovish. Spot gold rose 0.2% to $1,850.36 per ounce. Among other precious metals, silver rose 0.5% to $25.65 an ounce while platinum eased to $1,116.
"While gold continues to trade in a broad range, supporting price is increasing virus spread which has forced countries to impose stricter restrictions," Kotak Securities said in a note.
ETF investors remained on the sidelines. The holding of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, fell 0.9% to 1,161.00 tonnes on Thursday from 1,171.21 tonnes on Wednesday.
"US fiscal stimulus hopes, increasing new virus cases and a weaker U.S currency continues to offer lower-level support to the yellow metal. Meanwhile, hopes of swift global economic recovery and firm equities would limit major gains in prices. If the support of $1800 remains undisturbed, we can expect a recovery pullback in prices. However, the immediate downside turnaround point is seen at $1780," said Hareesh V, Research Head Commodities at Geojit Financial Services.
Asian stocks, US equity futures and Treasury yields retreated today with analysts saying that Biden's stimulus package already being priced in by the markets.
On gold traders' radar will be data on US retail sales, industrial production, business inventories and consumer sentiment figures, all due later today.
In a webinar, the Fed chief said the time to raise rates is “no time soon" and said policy makers would “let the world know" well in advance of any decision to taper bond purchases.
"Gold may continue to witness choppy trade along with US dollar and equities unless there is fresh triggers. However, general concerns about virus cases and hopes of US stimulus may continue to support prices. Also supporting price is political uncertainty in US amid impeachment proceeding against President Donald Trump," Kotak Securities said.
In India, the latest issue of sovereign gold bond issue closes for subscription today. The issue has been priced at ₹5,104 per unit or 1 gram of gold. Those who invest online will get a discount of ₹50 per unit. Gold prices have corrected about ₹7,000 from their August peak of ₹56,200 per 10 gram.
Sovereign gold bonds, which have a maturity period of eight years, offer an interest of 2.5% on top of the price appreciation, if any. Financial planners say that gold bonds are one of the most suitable instruments for investors looking to put money in gold for the long term.
(With Agency Inputs)