Gold prices today suffer biggest one-day fall in a year1 min read . Updated: 01 Jul 2019, 10:02 AM IST
- In India, gold prices also saw a sharp fall today
- Next big trigger for gold prices: US jobs data due Friday
In global markets, gold prices fell below the important level of $1,400 an ounce after Donald Trump and Xi Jinping at the G20 summit agreed to resume US-China trade negotiations. Spot gold prices dropped as much as 1.8%, the biggest intraday fall in a year, to $1,384.06 an ounce, and was at $1,391.32 in Singapore. Gold prices had hit a six-year high of $1,439.21 on June 25 and had rallied 8% last month, as the trade war dragged on and top central banks including the Fed adopted a more dovish tone, and tensions spiked between the US and Iran.
Gold prices today fell sharply in India, mirroring a big decline in global prices. On MCX, gold futures for August delivery fell below the ₹34,000 per 10 gram, when they declined 1.2% to ₹33,810. The October gold contracts on MCX also fell sharply but managed to hold on to ₹34,000 level. October gold futures contracts were down 1.2% at RS 34,026. The latest trigger for sharp decline in gold prices: Over the weekend, US and China agreed to a truce in their trade war, denting the safe-haven appeal of the yellow metal.
Investors are now focused on US jobs data due this Friday for clues on the Federal Reserve’s next move on policy.
Asian stocks markets, including Indian equities, rallied today amid a thaw in the China-US trade dispute averted one threat to the global economy, After his meeting with Chinese leader, Donald Trump said he would hold off imposing additional tariffs on Chinese imports and delay restrictions against Huawei Technologies Co., letting U.S. companies resume sales to China’s largest telecommunications equipment maker.
Analysts still bet on global central banks maintaining their bias towards more accommodative policy, thus supporting gold price.
“We’re quite positive toward gold, we think this abatement in the U.S. dollar strength and potential rate cuts in the near term will certainly continue to boost investment demand," said ANZ group analyst Daniel Hynes.
Michael Taylor, managing director of Moody’s Investors Service, said: “Although the US-China agreement will likely partially relieve recent negative sentiment in the financial markets and support near-term growth, it stops short of removing existing tariffs. However, we expect China will continue to ease policy in an effort to offset the impact of the existing tariffs and that major central banks will maintain their bias towards more accommodative policy." (With Agency Inputs)