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Gold price falls on weak global cues; silver rates below Rs 60K mark

Gold, Silver prices today: Overseas, gold futures traded near a one-week low hit in the previous session after President Trump halted negotiations with the US Congress on a large coronavirus stimulus bill

Rupa Burman Roy | October 7, 2020 | Updated 11:51 IST
Gold price falls on weak global cues; silver rates below Rs 60K mark
Gold, Silver prices in India on October 7:

Gold, Silver prices in India on October 7: Gold price slipped in the Indian commodity market on Wednesday tracking weakness from overseas after US President Donald Trump quashed hopes for a fourth stimulus package with a tweet.

 In a volatile trading session, Gold October Futures on the Multi Commodity Exchange and traded near the key psychological level of Rs 50K. MCX gold futures today fell by Rs 470 to Rs 50,050, after hitting an intraday high and low of Rs 50,520 and Rs 50,030, respectively. Yesterday, gold futures on MCX closed at Rs 50,008 per 10 gm. The bullion, trades almost Rs 6,000 lower than its lifetime high of Rs 56,191 per 10 gm hit last month.

Silver September Futures fell by Rs 950 to trade below 60K mark at Rs 59,680 per kg today after they touched an intraday low of Rs 59,440 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.

Overseas, gold futures traded near a one-week low hit in the previous session after President Trump halted negotiations with the US Congress on a large coronavirus stimulus bill. This comes at a time when top U.S. and European central bankers on Tuesday have called for renewed government spending, to recover major economies from the coronavirus pandemic induced recession.

Spot gold was trading flat at $1,877 per ounce, after falling almost 2% on Tuesday to a one-week low of $1,874.05. US gold futures were down 1.4% at $1,882, while Comex gold was trading 1.13% lower at $1,879 per ounce. On the other hand, silver rose 0.7% to $23.25 per ounce. Gold futures have retreated by 10.3% overseas, since hitting a record peak of $2,072.50 in August 2020.

Viewed as a hedge against inflation and currency debasement, global rates of the bullion metal have been trading in a consolidation phase from last week amid uncertainty on the US stimulus. Meanwhile, the dollar index was up 0.2% against other currencies.

Delay in negotiations over a new US coronavirus relief and the rising dollar index has kept sentiments tepid for the safe-haven asset. Gains were restricted in the bullion metal even as sentiments turned negative in global equity markets today.

Gold has risen over 25% this year, supported by unprecedented monetary stimulus from major central banks and amid rising worries about the sluggish pace of economic recovery due to the coronavirus pandemic. Worldwide, there were 360 lakh confirmed cases and 10.54 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 67-lakh mark and the death toll from COVID-19 infections rose to 10.4 lakh, as of today.

On the retail front, physical 24-carat bullion per 10 gram in the national capital fell to quote at Rs 53,360. Price of 24-carat gold stood at Rs 52,860 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold fell back to Rs 50,430 and 52,840, respectively.

On Gold's near term outlook, Anuj Gupta -  DVP- Commodities and Currencies Research, Angel Broking said," Yesterday Gold prices corrected 0.20% and closed at 50526 levels and silver prices corrected by 2.21% and closed at 60571 levels. Spot Gold ended lower by 1.87 per cent to close at $1877 per ounce and Spot silver plunged over 5 per cent to close at $23.1 per ounce."

He added,"U.S. President Donald Trump put a halt on the negotiation over the additional stimulus bill to support the U.S. economy until the upcoming elections might weigh on Gold prices. On the MCX, gold prices are expected to trade lower in today's session.

Commenting on technical indicators for the bullion, he said,"As for today traders can go for sell in gold at Rs 50,300 levels with the stop loss of Rs 50,700 levels for the target of 49,700 levels. They can also go for sell in Silver at Rs 60,000 levels, with the stop loss of 60,700 levels and for the target of 58,500 levels."

Gold price trading flat; silver rates at Rs 61,700

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