Gold price slipped in the Indian commodity market on Monday tracking weakness from overseas and traded near the key psychological level of Rs 50K.
In a volatile trading session, Gold October Futures on the Multi Commodity Exchange fell by Rs 470 to Rs 50,100, after hitting an intraday high and low of Rs 50,230 and Rs 50,030, respectively. Yesterday, gold futures on MCX closed at Rs 50,570 per 10 gm. The bullion, however, trades almost Rs 6,000 lower than its lifetime high of Rs 56,191 per 10 gm hit last month.
Silver September Futures traded Rs 670 lower at Rs 60,472 per kg today after they touched an intraday low of Rs 60,350 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.
Overseas, Spot gold was trading flat at $1,896.21 per ounce and U.S. gold futures were down 0.3% at $1,902, while Comex gold was trading 0.44% lower at $1,891 per ounce. On the other hand, silver rose 0.8% to $23.88 per ounce. Gold futures have retreated by 8.4% overseas, since hitting a record peak of $2,072.50 in August 2020.
Global rates of the bullion metal traded in a temporary consolidation phase, even though the dollar index was down 0.1% against the basket of six currencies.
Gains were restricted in the bullion metal as sentiments were negative with investors moving money to equity markets. Global markets, including US stock futures, were gaining momentum following news from White House on Trump's improving health and rose on expectations that Trump will leave hospital soon.
Delay in negotiations over a new US coronavirus relief aid also kept sentiments tepid for the safe-haven asset.
Gold has risen over 25% this year, supported by unprecedented monetary stimulus from major central banks and on news of fresh rounds of coronavirus-induced lockdowns across Europe and Britain. Viewed as a hedge against inflation and currency debasement, the bullion has risen substantially this year amid rising worries about the sluggish pace of economic recovery due to the coronavirus pandemic.
Worldwide, there were 354 lakh confirmed cases and 10.41 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 66-lakh mark and the death toll from COVID-19 infections rose to 10.2 lakh, as of today.
On the retail front, physical 24-carat bullion per 10 gram in the national capital gained to Rs 53,800. Price of 24-carat gold stood at Rs 52,920 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold traded at Rs 49,420 and 52,690, respectively.
On Gold's near term outlook, Hareesh V, Geojit's head of commodity research said," Gold remains choppy due to a volatile US dollar and hopes of fresh economic stimulus measures. Optimism over Covid vaccine, uncertainties over US presidential election in November and rising US-China tensions are also influencing the sentiments of the yellow metal."
On London spot technical outlook, he added," If prices hold the support of $1840 we can expect a rebound, but it needs to break $1920 to continue the momentum. An unexpected drop below $1820 would extend further selling pressure."
"Going forward, clarity on fiscal stimulus in the US, control on the number of COVID cases worldwide, or a vaccine will guide gold prices", said Nish Bhatt, Founder & CEO, Millwood Kane International.