Gold prices in India fell today amid rangebound trading, extending losses to the third day. On MCX, August gold futures were up 0.04% to ₹48,753 per 10 gram after falling 0.75% in the previous session. Silver prices today dropped 0.7% to ₹52,257 per kg. After hitting a record high of ₹49,348 last week, domestic gold prices have remained choppy. Domestic gold prices include 12.5% import duty and 3% GST.
In international markets, gold prices were flat today with spot rates little changed at $1,797.24 per ounce. Concerns that surging coronavirus cases could force countries to re-impose lockdowns and US-China tensions kept gold supported. In the previous session, gold had suffered a steep drop of about 1%.
Among other precious metals, platinum was steady at $824.27 and silver rose 0.1% to $19.19.
Gold has surged about 18% this year in international markets on expectations that the coronavirus crisis could force central banks to announce more stimulus. Gold, which pays no interest, tends to benefit when interest rates fall as this reduces the opportunity cost of holding bullion.
New York Fed President John Williams on Thursday said it could take a few years for the US economy to recover from the damage caused by the pandemic, and it was not yet the time to think about raising interest rates.
Gold may witness choppy trade as market players assess the virus situation as well as geopolitical issues, say analysts.
"On US-China front, tensions continue to simmer between world’s two largest economy over varied reasons like trade, the control of advanced technologies and the protection of civil liberties in Hong Kong," Kotak Securities said in a note.
"Gold, a traditional safe haven asset, has witnessed a positive correlation with other commodities and equity markets as market players switch between risker assets and US dollar while assessing the virus related situation. Virus cases are rising globally and especially in US which has caused countries to reimpose restrictive measures dampening economic activity. However, market players continue to focus more on signs of economic recovery, progress in vaccine development as well as expectations of additional stimulus measures," the brokerage added.
Globally, total number of coronavirus cases rose above 1.37 crore while the death toll climbed to 5.89 lakh. Covid cases in US, the worst affected country, continue to rise at a record pace. (With Agency Inputs)