Gold prices fall, silver tumbles in two days; Check Full Details Here
In global markets, gold rates slipped after strong gains in the previous week. But the decline was limited by fears of a second wave of coronavirus infections in Beijing.
NEW DELHI: Gold prices fell sharply in Indian markets today, tracking a decline in global rates. On MCX, August gold futures fell ₹600 to ₹46,755 per 10 gram, after a 0.12% slide in the previous session. July silver futures declined ₹750 to ₹46,953, following a ₹900 slide on Friday.
In India, physical demand of gold remained weak even as jewellery stores reopened, promoting dealers to offer discounts of up to $20 an ounce last week over official domestic prices. Domestic gold prices include 12.5% import duty and 3% GST.
In global markets, gold rates slipped after strong gains in the previous week. But the decline was limited by fears of a second wave of coronavirus infections in Beijing. Spot gold was down 0.7% at $1,718.13 per ounce, after the precious metal posted gains of over 2.5% in the previous week. Among other precious metals, silver fell 1.7% to $17.14, and platinum declined 0.6% to $800.59
Indicative of investors’ preference for safe-haven assets like gold, the holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), rose 0.1% to 1,136.22 tonnes on Friday. In India, gold exchange traded funds or ETFs saw net inflows of ₹815 crore in May as investors sought safe haven options amid stock market volatility and the coronavirus crisis, higher than the net ₹731 crore infused in April.
In a sudden resurgence of the coronavirus in the Chinese capital, Beijing reported its second consecutive day of record new numbers of COVID-19 cases. The recent outbreak has been traced to a major wholesale food market. Also, new coronavirus cases and hospitalizations in record numbers were reported in many US states.
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A weaker dollar also supported gold prices. The dollar index, which measures the strength of the greenback against other major currencies, fell 0.2%, making gold less expensive for holders of other currencies.
A surge in gold prices this year also weighed on demand, say analysts. Year-to-date, domestic gold prices are up about 20%, tracking a rise in global rates, following 25% gain last year.
“Virus cases have been on a rise globally which has fueled worries about a second wave of infections. Gold also benefited from Fed’s dovish stance as the central bank last week highlighted that interest rate could remain near record low levels until at least 2022.
US-China tensions also kept market players nervous about future of the trade deal lending support to safe haven assets,” Kotak Securities said in a recent note. (With Agency Inputs)