Gold, silver prices slump, set for biggest weekly fall in over two years
1 min read 08 Nov 2019, 05:55 PM ISTOptimism about US-China trade deal has dented gold pricesIn India, the decline in gold prices were capped due to depreciation of the rupee
PremiumIn global markets, spot gold prices fell 0.1% to $1,465.97 per ounce and were poised for their biggest weekly fall - 3% - since May 2017. In the previous session, gold prices dropped 2% to their lowest in more than a month. Analysts attributed the recent price drop to optimism over a China-US trade deal which has boosted risk-on sentiment. China and the US have agreed to roll back tariffs on each others' goods if the first phase of a trade deal is reached between the countries, officials of both the countries said on Thursday.
Investors have also moved to the sidelines with holdings in the world's largest gold-backed exchange-traded fund SPDR Gold Trust dipping 0.16% on Thursday.
Silver prices also dropped 0.8% to $16.98 per ounce, and was set to fall about 6% for the week, their steepest drop since July 2017.
Despite their recent slump, gold prices have risen over 14% in global markets so far this year mainly due to the protracted trade war that spurred global economic slowdown fears.
In Indian markets, gold prices moved higher, after a sharp fall in the previous session. On MCX, gold prices rose 0.66% to ₹37,823 per 10 gram, boosted by the rupee's weakness against the US dollar. The rupee today fell to 71.33 against the US dollar after Moody's downgraded India's outlook to negative from stable. Gold prices had fallen sharply in India in the previous session, reflecting a similar global trend. Despite today's rise, gold prices are down about ₹2,200 from their early September highs of about ₹40,000.
In spot markets, gold prices declined, tracking subdued global cues. Prices of 24 Karat gold today fell ₹196 to ₹38,706 per 10 gram in Delhi while silver prices tumbled ₹956 to ₹45,498 per kg, Press Trust of India reported, citing HDFC Securities.
"The downside was limited with sharp rupee depreciation after Moody's lowered India outlook," HDFC Securities Senior Analyst (Commodities) Tapan Patel said.
High gold prices have hurt gold demand in India this year. Demand for gold in India this year is likely to drop to the lowest since 2016 as elevated prices and a weak economy deter buyers in the world’s second-biggest bullion consumer, according to the World Gold Council.
(With Agency Inputs)
