Home >Markets >Commodities >Gold prices today fall sharply, go down below 50,000; silver rates crash

Gold and silver prices in India today fell sharply, extending losses to the third day. On MCX, October gold futures were down 1.2% to 49,764 per 10 gram while silver futures plunged 4% to 58,851 per kg. Precious metal prices have fallen sharply this week across the globe as investors sought the safety of US dollar. Gold prices fell about 100 in the previous session, extending Monday's 1,200 drop. Silver had also edged lower on Tuesday, adding to its Monday's 6,000 loss.

As compared to last month's highs of 56,200, gold is now down over 6,000 per 10 gram in India.

"The dream run for gold has hit a roadblock, after hitting life highs of over 56,000/10gm last month, the yellow metal has been falling. Internationally, Comex Gold is trading below the $1900/oz level. The primary reason for the fall in gold prices is the rally in the dollar index, uncertainty over the next stimulus package by the US government to help give a push to the slowing growth rate. The dollar index is near an 8-week high against the other currencies in the basket," said Nish Bhatt, Founder & CEO, Millwood Kane International on Gold falling below 50,000/10gm.

In global markets, gold prices today touched a six-week low, as the dollar strengthened with the coronavirus crisis rattling sentiment in Europe, while investors grew wary of further stimulus from the U.S. Federal Reserve. Spot gold fell 1% to $1,880.46 per ounce.

Silver fell 4.8% to $23.25 per ounce, having hit a nearly two-month low of $23.04 earlier in the session.

The dollar index hit an eight-week peak, bolstered by upbeat U.S. home sales data and concerns about a second wave of coronavirus infections in Europe.

The dollar index hit an eight-week peak against other currencies. A firmer dollar makes gold more expensive for holders of other currencies.

Gold is considered a safe-haven asset which benefits in time of economic and political uncertainty. But despite weaker risk sentiment, gold prices have trended lower this week as investors sought the safety of US dollar and moved out of commodities and equities.

Analysts say that while US dollar is seen as the preferred asset at present, gold may also benefit from safe haven buying if global risks continue to intensify.

"We expect buying to emerge at lower levels as concerns about US economy may limit upside in US dollar," Kotak Securities said in a note.

To control the spread of coronavirus, the UK has imposed fresh set of curbs to tackle a second wave of COVID-19.

Investors remained on the sidelines despite the recent price drop. ETF Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.05% to 1,278.23 tonnes on Tuesday. (With Agency Inputs)

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