Gold prices today plunge, silver rates crash ₹2,500 in a day1 min read . Updated: 13 Oct 2020, 10:05 PM IST
- The uncertainty over US stimulus package continued, weighing on gold
- A stronger US dollar also weighed on gold
Tracking softer global rates, gold and silver prices today fell sharply in Indian markets. On MCX, December gold futures were down 1.5% at ₹50,310 per 10 gram in their first decline in three days while silver futures plunged 4% or ₹2,500 to ₹60641 per kg. Both gold and silver had edged higher in the previous session, rising 0.55% and 0.26% respectively. In global markets, gold prices today edged lower today amid a firmer US dollar.
Investors turned to the greenback as a haven after a setback in a Covid-19 vaccine trial and deadlocked talks on U.S. economic stimulus.
Spot gold fell 1.7% at $1,890.01 per ounce. Other metals too joined the slide, with silver diving 3.8% to $24.15 per ounce, platinum falling 0.8% to $866.03, and palladium shed 2.8% to $2,334.18.
The dollar index was up 0.5% against rivals, making gold costlier for holders of other currencies.
Gold, considered a hedge against inflation and currency debasement, has risen 25% this year in global markets amid unprecedented global levels of stimulus during the pandemic. In India, gold had hit a record high of ₹56,200 in August.
Putting further pressure on gold prices, the IMF today said forecasts for the global economy were "somewhat less dire" as wealthy countries and China rebounded more quickly than expected.
"With less than a month to Presidential election and lack of consensus, we believe that a comprehensive deal is unlikely. We may continue to see market reaction to comments from either side while choppiness may persist until a decision is taken," Kotak Securities said in a note.
"Market players however expect that a deal may become easier post-election while a Democrat win could also result in bigger package. Expectations of a stimulus deal may continue to keep risk sentiment supported," it added.
Gold traders will be watching progress on the UK trade deal front. UK Prime Minister Boris Johnson set a deadline of Thursday to thrash out the outline of a European Union trade deal.
Back in India, the latest tranche of sovereign gold bonds opened for subscription on Monday and will close on Friday. The issue price has been fixed at ₹5,051 per gram of gold. Investors who apply online and make payment against the application through digital mode get a discount of ₹50 per gram. (With Agency Inputs)