Gold prices in India fell today, extending their recent decline amid a weak global trend. Silver rates also declined. On MCX, October gold futures prices were down 0.45% to ₹38,300 per 10 gram, off over ₹1,500 from its recent highs of ₹39,885. Silver prices on MCX also extended decline today, falling 0,7% to ₹47,405 per kg. That is down about 8% from their recent highs of ₹51,489. The decline in domestic gold and silver prices come amid a rebound in the rupee’s value against the US dollar and a slide in global prices of precious metals.
In global markets, gold prices today fell close to one-month low as improved risk appetite dented safe haven assets like gold. Spot gold was down 0.3% at $1,494.04 per ounce.
Analysts say that a broad improvement in risk appetite is taking some shine off gold. Gold prices are now down over 4% in less than a week, hurt by a rebound in equity markets. Silver prices today in global markets eased 0.1% to $17.94 per ounce.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.8% to 882.42 tonnes on Monday.
Commenting on the recent decline in gold prices, Hitesh Jain, senior analyst at Yes Securities, said: “Governments in Europe and Asia are gearing for unleashing fiscal stimulus, which can counter the deceleration seen in manufacturing and trade. A likely fiscal stimulus across the global can provide the much-needed impetus to the global economic engine, which can lead to and unwinding of the long-only bonds and gold trade."
Gold traders will be looking forward to this Thursday's meeting of European Central Bank, which is widely expected to deliver a cut to interest rates as policymakers race to battle risks of a global downturn. The US Federal Reserve in its policy meet next week is also widely expected to cut rates.
Still many analysts hold on to their bullish view on gold, saying that lower interest rates will support prices of non-yielding gold.
Back in India, record high prices have hurt jewellery demand and jewellers hope that the recent decline in prices will improve demand ahead of the festive season. But gold exchange-traded funds in India saw the highest inflows in more than six years as investors poured in money seeking safe havens amid record high domestic prices. Despite the recent fall, gold prices in India are up over 20% so far this year.
Net inflows in August into gold ETFs rose to ₹145 crore, the highest since December 2012, according to data from the Association of Mutual Funds in India.
Meanwhile, government of India's Sovereign Gold Bond Scheme 2019-20 - Series IV has opened for subscription at an issue price of ₹3,890 per gram. Those applying online get a small discount to the issue price. The latest tranche is the last in the series of four issuances planned for financial year 2019-20.