Weighing on gold price is signs of progress on covid vaccine front, say analysts
Gold rates in India are now down more than ₹6000 from their August highs
Gold and silver prices today slipped in Indian markets, extending their recent decline. On MCX, gold futures fell 0.3% to ₹50,180 per 10 gram in its fourth straight day of losses while silver futures declined 0.8% to ₹62,043 per kg. Gold and silver prices had fallen sharply in previous session. Gold fell about ₹450 per 10 gram while silver rates declined ₹718 per kg. Gold prices are now down more than ₹6000 from their August highs of ₹56,200.
In global markets, gold prices slipped today, pressurized by a stronger US dollar. Optimism about progress in covid vaccine development also dented the precious metal's appeal. Spot gold fell 0.1% to $1,869.86 per ounce.
Among other precious metals, silver fell 0.3 % to $24.24 per ounce. Platinum eased 0.5% to $937.30, while palladium was down 0.7% at $2,311.91.
"After taking support near the $1850/ounce, gold is struggling to break past the $1900 level and we have seen choppy trade in last few sessions," Kotak Securities said.
Mixed factors have kept gold in a range, say analysts. Weighing on gold price is signs of progress on vaccine front even if there is not much clarity on timeline as to when a vaccine will become available publicly, they say.
Also weighing on price is increasing uncertainty about US fiscal stimulus amid possibility of a divided Congress.
The dollar index was up 0.16%, making gold expensive for holders of other currencies. Pfizer on Wednesday said that its covid vaccine candidate was 95% effective and safety data milestone required by US Food and Drug Administration (FDA) for emergency use authorization (EUA) has been achieved. Pfizer plans to submit within days to the US and European regulators.
Gold ETF outflows also show weaker investor interest. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.60% to 1,219.00 tonnes on Wednesday.
"Gold may remain choppy with mixed factors in place however we expect buying interest to emerge at lower levels as price may remain supported by hopes of additional stimulus measures," Kotak Securities said.
"Silver, along with gold, may remain also witness choppy trade amid lack of fresh triggers but we maintain buy on dips view on expectations of additional support to combat virus risks," it added.
On the stimulus front, US President-elect Joe Biden expressed hope on Wednesday that Republicans in the Congress would be more inclined to move forward on COVID-19 relief legislation after President Donald Trump leaves office in January. Asian stock markets were mostly lower today, tracking overnight decline in US equities as restrictions to curb the coronavirus spread overshadowed progress toward a vaccine.
Meanwhile, Britain and the European Union are in talks to reach a trade deal after Britain's transition period ends on January 1. (With Agency Inputs)
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