Gold prices today fall sharply after jumping ₹1,000 in 3 days

Gold prices in India fell sharply today after a seeing a strong uptrend in the previous week. On MCX, gold futures were today down 0.5% to ₹51,406 per 10 gram while silver dropped 0.6% to ₹58,032 per kg. Over the past three sessions, gold had jumped ₹1,000 per 10 gram. In global markets, the yellow metal remained near 3-week highs, supported by lower bond yields and pullback in US dollar. Spot gold was steady at $1,755.59 per ounce. 

Among other precious metals, silver dropped 0.5% to $20.22 per ounce after data showed China’s factory activity unexpectedly contracted in July amid sporadic Covid outbreaks.

The US dollar index has pulled back to 3-week lows as market participants bet that the Fed will reduce the quantum of future hikes with the US economy at risk of recession. A weaker US dollar makes greenback-denominated gold less expensive for other currency holders.

“Gold and silver gained last week after the release of a downbeat U.S. economic data and strength in the euro. Bullions' uptick were also supported by a weaker dollar and declining Treasury yields that saw prices hit a three-week high and helped the haven assets on pace for a second straight weekly gain,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

“Gold has support at $1751-1740, while resistance is at $1774-1782. Silver has support at $19.88-19.65, while resistance is at $20.40-20.55. In rupee terms gold has support at ₹51,150–50,820, while resistance is at ₹51,680–51,840. Silver has support at Rs57,550-56,940, while resistance is at ₹58,980–59,510," he added. 

The holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.06% to 1,005.87 tonnes on Friday from 1,005.29 tonnes on Thursday. 

Last week, India launched its first international bullion exchange as the world's second-biggest consumer of the precious metal tries to bring transparency to the market for the precious metal. 

“The spot exchange offers a whole lot of benefits and we will be taking full advantage of this new opportunity. By doing so, we will be taking a big leap in our 'one India, one gold rate’ campaign as prices are currently distorted since nominated agencies designated to import gold charge different margins,” said Ahammed MP, Chairman, Malabar Gold & Diamonds.

(With Agency Inputs)