Home >News >India >Gold prices today fall for second day, silver rates crash

Gold prices fell sharply in India today with June futures on MCX falling 0.6% to 43,302 per 10 gram, extending losses to the second session. Silver took a beating with May futures crashing 3% to 39,758 per kg. Gold rates in India had surged sharply last week rising about 3,000 per 10 gram in tandem with a rally in global rates.

In global markets, gold prices moved higher, lifted by demand for safe-haven bullion as increasing coronavirus cases across the world stoked fears of more economic damage. Spot gold was up 0.3% at $1,621.85 per ounce. A weak dollar also helped lift gold demand, making bullion cheaper for investors holding other currencies.

Among other precious metals, platinum slipped 0.5% to $738.05 per ounce, while silver eased 0.8% to $14.36 per ounce.

The head of IMF on Friday warned that countries must respond with "massive" spending to avoid a cascade of bankruptcies. Asian shares were sharply lower today while oil prices took another beating. Dow futures were also lower.

Reflecting the investor sentiment, the holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.17% to 964.66 tonnes on Friday.

US President Donald Trump on Friday signed a $2 trillion economic stimulus package, the largest in U.S. history, while the Federal Reserve has pledged unlimited bond purchases.

In India, as the physical trading of gold came to a standstill due to the 21-day lockdown, massive discounts were offered over international prices, according to a Reuters report. Last week, discounts rose to their highest since mid-September, at $48 an ounce, the report said. The domestic price includes a 12.5% import tax and 3% GST.

Gold market participants remained concerned about a supply squeeze following a sharp divergence in London and New York prices, as the coronavirus closed precious metals refineries. However, the historic gold squeeze seems to be easing. The spread between London and New York prices stood at about $35 an ounce on Monday, compared with more than $60 last week, Bloomberg reported. (With Agency Inputs)

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