Home >Markets >Commodities >Gold prices fall 500 per 10 gram, silver rates slump over 1,000
Gold rates settled at  ₹51,280 per 10 gram on MCX
Gold rates settled at 51,280 per 10 gram on MCX

Gold prices fall 500 per 10 gram, silver rates slump over 1,000

  • Gold and silver prices in India have fallen sharply after hitting record highs last month
  • Analysts say that gold is likely to remain supported amid low interest rates, surging cases of coronavirus and expectations of more stimulus from central banks

Gold prices fell sharply in India on Friday tracking a decline in global markets. On MCX, gold futures fell 1% or about 500 to 51,280 per 10 gram. Silver futures slumped 1,056 to 67,926 to per kg. Both gold and silver have fallen sharply after hitting record highs of 56,200 and about 80,000 last month. On a week-on-week basis, gold prices are however up about 700 per gram.

Analysts say that covid vaccine developments and improving economic data present near-term headwinds to gold but low and negative interest rates, weaker US dollar and expectations of further stimulus will keep gold supported.

In global markets, gold futures on Friday dropped about 0.7% to $1,950.20 an ounce.

Gold prices dipped on Friday after the European Central Bank stopped short of offering any concrete signals on further stimulus. Also, the US Senate blocked a Republican bill that would have provided around $300 billion in new coronavirus aid. Gold is perceived as a hedge against inflation and currency debasement.

"Gold prices consolidated and remained at steady levels even when Nasdaq plummeted," says Nirali Shah, Senior Research Analyst, Samco Securities, referring to the sellloff in US tech stocks.

The Nasdaq 100 on Friday fell for the fifth time in seven days to cap its worst week since March. The tech-heavy index is down 11% from its September 2 record.

In India, gold ETFs saw an inflow of 908 crore in August, the fifth month of inflow in a row. This takes the net inflow in gold exchange traded fund or ETF category to 5,356 crore in January-August period of 2020.

Latest data show that the Reserve Bank of India's gold reserves rose by $321 million in week ended September 4 to $37.521 billion. (With Agency Inputs)

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