Gold prices today fall for first time in 3 days, silver slumps2 min read . Updated: 21 May 2020, 03:31 PM IST
- Gold prices in India had hit a record high last week
- Expectations of more stimulus from central banks have lifted gold prices
Gold prices in India fell sharply today, their first decline in three days. On MCX, June gold futures fell 1% to ₹46,680 per 10 gram. Silver futures on MCX slumped 2% to ₹48,154 per kg. Last week, gold rates had hit a new high of ₹47,980 in tandem with a global rally in the precious metal amid increasing US-China tensions and expectations of further stimulus from central banks.
In global markets, gold prices fell 1% to $1,732.43 per ounce today amid a firm dollar and hopes of a quick economic recovery dented bullion's safe-haven appeal.
Spot gold was down 1% at $1,732.43 per ounce at 0930 GMT. U.S. gold futures fell 1.1% to $1,733.60 per ounce.
A stronger dollar makes gold more expensive for holders of other currencies.
Gold prices climbed to their highest since October 2012 at $1,764.55 earlier this week, mainly driven by recession fears, U.S.-China tensions and massive monetary and fiscal stimulus.
"Hopes of a swift global economic recovery are likely to limit the safe haven demand of the commodity. A steady dollar and limited physical market activities continue to maintain pressure on the yellow metal, said Hareesh V, head of commodity research at Geojit Financial Services.
The minutes of the latest Federal Reserve policy meeting showed that members acknowledged the possibility of further support measures if the economic downturn persists. Gold prices tend to go up on expectations of lower interest rates. So far this year, gold prices are up about 14% this year as central banks rolled out a wave of rate cuts and other stimulus to limit economic damage from the pandemic.
"Bleak economic outlook makes a case for Fed and government to continue with stimulus measures. Also supporting price is increased tensions between US and China and US spar with World Health Organization," Kotak Securities said in a note.
Global coronavirus cases has surpassed 5 million while the pandemic has claimed over 326,000 lives,
"Gold may witness choppy trade as market players assess virus related situation as well US-China relation. However the general bias may be on the upside," the brokerage added.
(With Agency Inputs)