Gold and silver prices in India fell sharply today amid a decline in global rates. On MCX, gold futures declined 0.85% to ?51391 per 10 gram while silver futures plunged 1.4% to ?67798 per kg. Gold prices have traded in very narrow range over the past two weeks in India, after correcting sharply from last month’s highs of ?56,200. In the previous session, gold had edged up 0.1% while silver had closed flat.
“MCX Gold slipped in tandem with comex gold, as the U.S. dollar index strengthened, although doubts over a swift global economic recovery and the Fed’s pledge to hold interest rates near zero until at least 2023 limited losses for the safe-haven metal. The Fed signalled it expects the U.S. economic recovery from the coronavirus crisis to accelerate with unemployment falling faster than the central bank expected in June. Meanwhile, data showed U.S. consumer spending slowed in August, pointing to a stall in the economic recovery from the effects of the pandemic. For intraday we expect tone to be bearish,” said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers on Gold.
In global markets, gold prices eased today amid a stronger US dollar. But Federal Reserve’s pledge to hold interest rates near zero until next few years and concerns over global economic recovery helped support gold at lower levels. Spot gold was down 0.3% to $1,954.42 per ounce after hitting a nearly two-week high of $1,973.16 in the previous session.
Among other precious metals, silver dropped 0.8% to $27 per ounce while platinum dipped 0.9% to $959.58.
The dollar index rose 0.4% against its rivals, making gold more expensive for holders of other currencies.
Overnight, Federal Reserve policymakers signaled that their benchmark short-term interest rate will likely remain at zero at least through 2023 and possibly even longer. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
“Amid other factors, gold remains supported by mixed US economic data, US-China tensions and Brexit uncertainty. Delay in US stimulus is also weighing on market sentiment,” Kotak Securities said in a September 16 note.
ETF outflows however show weaker investor interest in gold. Gold holdings with SPDR ETF, the world’s biggest gold-backed exchange traded fund or gold ETF, fell by 0.42 ton to 1247.569 tonnes, lowest since July 31,” the brokerage added.
Fed chief Jerome Powell said that while the economy has rebounded more quickly than expected, the job market is still hurting and the outlook is uncertain.
Commenting on gold prices, Reserve Bank of India governor Shaktikanta Das at an event on Wednesday said that the prices of the precious Gold prices moderated after reaching an all-time high in the first week of August 2020 on prospects of economic recovery.
Meanwhile, the White House also on Wednesday signalled that it is willing to increase its offer in talks with Democrats, and that Senate Republicans should go along in order to seal a stimulus deal in the next week to 10 days. (With Agency Inputs)
News Source:- livemint