Gold prices rise today after a massive fall2 min read . Updated: 06 Nov 2019, 04:22 PM IST
- Rising hopes of a US-China trade deal has led to a big fall in gold prices
- Gold rates are likely to remain choppy in near term, say analysts
Gold prices in India today rose after suffering a massive fall in the previous session. This same trend was also seen in global markets. On MCX, gold prices were up 0.54% to ₹38,085 per 10 gram, after falling 1.6% or ₹610 in the previous session. Silver prices were flat today, rising just 0.07% to ₹45,532 per kg, after slumping 2.52% or ₹1,174 per kg in the earlier session. In spot markets, prices of 24 carat gold remained at ₹38,870 per 10 gram Delhi while silver at ₹46,509 per kg, Press Trust of India reported, citing HDFC Securities.
In global markets, gold prices were marginally higher today, following a massive fall in the previous session.
Spot gold prices were up 0.2% to $1,486.53 per ounce, after slumping 1.7% in the previous session - the biggest one-day fall in over one month. Rising hopes for a trade deal and a series of solid US economic data boosted the risk sentiment, hurting the price of safe-haven assets like gold. The dollar also rose against a basket of major currencies.
A stronger dollar makes gold expensive for buyers in other currencies.
"Gold and silver prices witnessed correction with rally in equity indices as US and China are getting closer to sign the Phase 1 deal," HDFC Securities said in a recent note.
Gold rates are likely to remain choppy in near term, say analysts.
Top officials of US and China have signalled that they are pushing hard for a 'phase one' trade agreement, possibly some time this month.
However, the investment demand of gold remained relatively strong with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saying that its holdings rose 0.13% to 915.85 tonnes on Tuesday from 914.67 tonnes on Monday.
ETF holdings backed by gold are at the highest since 2013 after posting a modest rise last week. The stockpile has risen every week since August, apart from a single weekly drop in September.
Overall, the holdings of gold-backed ETFs hit a new all-time high of 2,855.3 tonne in the third quarter, said World Gold Council (WGC) on Tuesday.
Despite the recent correction, gold prices in India are still up about 20% so far this year, after touching a record high of ₹39,885 per 10 grams in early September. The price rise, coupled with a weak economy, has hurt gold demand.
Gold demand in India this year could fall to lowest in three years, Bloomberg reported, citing a top official of World Gold Council. Gold purchases may fall to the lower end of a 700 to 750 ton range, the official said.
Jewellers have also reported an increase in scrap supply as customers trade in their old jewellery, taking advantage of the price increase. (With Agency Inputs)