Gold prices in India fell sharply today, snapping a three-day gain as the country goes into a 21-day lockdown. On MCX, gold futures were down 0.8% to ?41,039. Silver rates however edged 0.31% higher to ?40,648 a kg. Gold prices in India have unperformed global markets as the lockdown hits trading volumes and demand.
On the other hand, in global markets, gold advanced for a third straight session today, hitting its highest in about two weeks. Spot gold gold today rose as much as as much as 1.6% to $1,635.79 earlier in the day – its highest since March 12. Among other precious metals, silver rose 1.6% to $14.49 per ounce while platinum gained 3% to $729.49.
US Federal Reserve’s recent unprecedented stimulus measures as well as optimism that US lawmakers are closer to a deal on $2 trillion stimulus package to cushion the economic damage from the coronavirus outbreak, lifting equities and gold.
After days of consolidation, gold has come out of the $1450-1550/ounce range, Kotak Securities said in a note. Gold has rallied on US Federal Reserve’s announcement of unlimited quantitative easing and programmes to support credit markets. Other central banks are also taking measures to support their economies.
ETF inflows also show buying interest in the metal. The holdings of world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose 1.3% to 935.98 tonnes on Tuesday.
On the other hand, weighing on gold price is weaker outlook for consumer demand as lockdowns hit consumer spending. India, one of world’s biggest consumer of gold, has announced a 21-day lockdown in the entire country to deal with the spread of coronavirus.
While the momentum is positive, Kotak Securities says, a sustained break above $1600/ounce is needed for extended gains.
Fed’s latest stimulus measures has also lifted silver prices. ETF inflows also show buying interest in silver, say analysts.
News Source:- Moneycontrol