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Gold price rises for second day; silver rates at Rs 69,600

Gold, Silver prices today: Commodity analysts said traders are awaiting the outcome from the US central bank's two-day policy meeting, scheduled on September 15-16.

Rupa Burman Roy | September 15, 2020 | Updated 13:31 IST
Gold price rises for second day; silver rates at Rs 69,600
Positive developments around potential COVID-19 vaccines after AstraZeneca resumed its phase-3 trial capped gains in the commodity

Gold, Silver prices in India on September 15: Gold price rose for the second straight session on Tuesday as the dollar weakened ahead of FOMC meeting on expectation that Fed policymakers would maintain a dovish policy.

Escalating tensions between US & China amid rising number of infections around the globe dented hopes of a fast economic recovery. Bleak global growth prospects and political and financial uncertainty has boosted the appeal for safe-haven assets.

Positive developments around potential COVID-19 vaccines after AstraZeneca resumed its phase-3 trial capped gains in the commodity.

Gold price rises to Rs 51,380; silver rates at Rs 68,000

On the Multi Commodity Exchange, Gold October Futures gained Rs 263 at Rs 51,950, after hitting an intraday high of Rs 51,950 against the previous close of Rs 51,687 per 10 gm. MCX gold futures currently trade over Rs 4,241 lower than the lifetime high of Rs 56,191 per 10 gm, hit on August 7. Since the beginning of the year, the yellow metal has risen 41.5% to life-time high on MCX.

Silver September Futures, gained Rs 510 to Rs 69,475 per kg today after they touched an intraday high of Rs 69,600 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.

Overseas, gold and silver held steady following a sharp rise in the earlier session, aided by a weak dollar. Spot gold was flat at $1,956.17 per ounce after gaining 1% on Monday. Comex gold was also trading flat at $1,953 per ounce, while US gold futures gained 0.1% at $1,966.40. Silver, on the other hand, eased 0.1% to $27.12 per ounce.

Commodity analysts said traders are awaiting the outcome from the US central bank's two-day policy meeting, scheduled on September 15-16. This will be the first meet since Fed Chairman Jerome Powell unveiled a policy shift towards more inflation tolerance in August, raising the expectation that the central bank would keep interest rates ultra-low to support the economy.

The upcoming FED policy meet that ends on Wednesday, could provide more cues on stimulus measures and inflation targeting.

Om the equities front, Asian indices were mostly trading positive on optimism around coronavirus vaccine trials and better than expected Chinese IIP and retail sales data.

Traders said investors rushed to the safe-haven asset as the number of coronavirus cases rose in the United States and some other countries, re-imposing anti-disease controls that disrupt businesses. Worldwide, there were 294.42 lakh confirmed cases and 9.32 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 80,808 and total coronavirus cases to 49.26 lakh as of Tuesday.

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During the last week, gold prices showed a mixed trend, on the back of a recovery in the dollar over rising demand from banks and encouraging U.S. employment data.

On the retail front, physical gold dealers continued to offer discounts in India as the precious metal's demand fell due to high prices. In India, 24-carat bullion per 10 gram in the national capital traded at Rs 54,550. Price of 24-carat gold stood at Rs 53,450 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold stood at Rs 50,910 and 53,130, respectively.

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Technical outlook

On gold prices, Religare Broking said," Gold jumped as the dollar weakened after the European Central Bank kept its policy unchanged and US jobless claims held at high levels, dimming hopes of a quick economic recovery from the effects of the coronavirus pandemic. Last week, gold prices gained 0.53% in international markets, whereas prices were up 1.26% on MCX."

Anuj Gupta, DVP- Commodities and Currencies Research, Angel Broking said, "Widening impact of the pandemic on the global economy continued to boost the demand for the safe haven, Gold.  Geopolitical tension in the Middle East may also support the bullion. On the back of increased demand for safe haven, we are recommending a buy in gold and silver.

Cameron Alexander, Director of Precious Metals Research at GFMS, Refinitiv said,"The rally in gold has been powered by a safe-haven appeal for the metal due to the worsening economic conditions resulting from an out-of-control pandemic. The central banks around the world continue to inject stimulus to resuscitate domestic economies, which has led in some cases to currency devaluation especially dollar and lower interest rates, further supporting the rally. Another factor that could disrupt the financial markets and support the gold rally is the political developments in the U.S."

"Looking ahead, the focus will continue to be on the coronavirus developments worldwide and on fresh economic data coming out of the United States which will influence the price of gold in the short to medium term. Investors will be monitoring just how quickly the world's largest economy can return to expansion mode and how soon an economic relief bill will be finalised," he added.

On Silver, Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking said," Silver has been shining relatively faster and brighter in comparison to gold in the international as well as domestic markets. Easy money policy of central banks, weakness in the US dollar, rising investment demand, and the belief of investors in silver as an asset class is resulting in optimism for price. 2020 will be remembered as the year of silver for investors across the globe."

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