A big drop in gold prices as compared to August highs is expected to boost jewellery demand ahead of Diwali
Gold prices have also seen a sharp correction this week
Gold and silver prices in India struggled for direction today. On MCX, gold futures edged 0.07% higher to ₹50,635 per 10 gram while silver rates dropped 0.2% to ₹62,615 per kg. In the previous session, gold prices had risen 0.76% or ₹380 per 10 gram while silver had edged 0.28% higher. In India, analysts expect a rise in sales this week on the occasion of Dhanteras and Diwali. Besides gold prices have significantly corrected from its August levels of of ₹56,000 when it hit a record high.
"The footfalls are better and people are interested. Sales are recovering but it will not be as good as last year during the same period," World Gold Council (WGC) Managing Director (India) Somasundaram PR told Press Trust of India.
All India Gem and Jewellery Domestic Council Chairman Anantha Padmanaban told Press Trust of India that the jewellery market is recovering gradually and the consumer sentiment is turuning positive.
"This year, Dhanteras is overlapping on two days, we are expecting maximum traction on November 13 across the country. We expect the pent-up demand to translate into sales," he said.
In global markets, gold prices were steady today as global vaccine rally in equities fizzled out. As covid cases continued to rise across the world, fears of fresh restrictions that could impact economic activity hurt risk sentiment despite optimism from the developments in a potential vaccine.
Spot gold was steady at $1,876.92 per ounce but it remained down 3.8% for the week - its worst weekly performance since late-September. Apart from the global rally in equities after Pfizer reported results of its covid vaccine trial, a stronger US dollar also hurt gold prices this week. The dollar index remained steady today but was on track for a 0.7% weekly gain.
Among other precious metals, silver today rose 0.1% to $24.26 per ounce while platinum was steady at $879.26.
Today, most Asian equity markets followed their U.S. counterparts lower as a resurgence in coronavirus cases added to concern that tougher restrictions may hamper the economic recovery.
On Thursday, speaking at a a virtual European Central Bank forum, Fed Chair Jerome Powell said the rising likelihood of an effective coronavirus vaccine is good news for the economy in coming months, but near-term risks remain as the COVID-19 disease continues to spread unchecked.
Powell repeated his view that more action from both the Federal Reserve and from Congress, in the form of further fiscal stimulus, will likely be needed.
(With Agency Inputs)
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