Gold prices today fall for second time in 3 days, down ₹6000 from record high2 min read . Updated: 11 Nov 2020, 09:16 AM IST
- Analysts say that gold will likely draw support at lower levels as global challenges are far from over
- Earlier this week, gold and silver rates had seen a big correction amid covid vaccine enthusiasm
Gold and silver prices edged lower today in Indian markets tracking muted global trend. On MCX, gold futures fell 0.15% to ₹50,425 while silver futures declined 0.35% to ₹62,832 per kg. This is the second day of fall in gold prices in three days. In the previous session, gold prices rose 1.4% or ₹700 per 10 gram while silver rates had surged 3.3% or ₹2,000 per kg. On Monday, gold prices had crashed ₹2,500 per 10 gram amid covid vaccine enthusiasm.
In global markets, gold prices inched higher today on hopes of more stimulus measures as surging coronavirus cases in many parts of the world clouded the economic outlook. But optimism over covid vaccine developments limited gains. Spot gold rose 0.2% to $1,879.31 per ounce while silver rose 0.2% to $24.26 and platinum fell 0.1% to $881.98.
A weaker US dollar also supported gold. The dollar index was down 0.11% making the precious metal cheaper for holders of other currencies.
Enthusiasm over the prospects for a coronavirus vaccine after Pfizer announced initial trial results has improved global risk sentiment and had sent safe-haven assets like gold into tail spin earlier this week. But analysts say that gold will likely find support at lower levels as the coronavirus shot still has several hurdles to clear while there are concerns over the transition of power to President-elect Joe Biden and a virus resurgence.
"Gold’s sharp rally in last few days made it vulnerable to profit taking while progress on vaccine front was the trigger. Price has however managed to take support near $1850/oz and we could see some more recovery as global challenges are far from over," Kotak Securities said in a note.
"Gold ETF flows indicate that investors are uncertain about price direction. Also weighing on gold price are concerns about US fiscal stimulus amid increased possibility of a divided US Congress. However, supporting gold price is rising virus cases in Europe and parts of US which has forced authorities to impose tighter restrictions. The longer these restrictions are in place the greater will be the negative impact on the economy. Mixed economic data from major economies also highlights persisting challenges," the brokerage said.
Back in India, analysts hope the recent drop in prices will give some fillip to gold demand ahead of Dhanteras and Diwali. In August gold had hit a record high of ₹56,200.
The latest tranche of government of India's sovereign gold bonds is currently open for subscription. The RBI has fixed issue price at ₹5,177 per gram of gold. (With Agency Inputs)