Gold, Silver prices in India on September 21: Gold prices traded lower on Monday, despite softer dollar as investors focused on speeches by Federal Reserve policymakers due this week on the US central bank's approach to inflation and stimulus measures.
Both commodity and equity markets traded volatile today as investors were concerned about the fresh coronavirus-induced curbs, globally denting hopes of a swift economic recovery.
On the Multi Commodity Exchange, Gold October Futures fell Rs 168 at Rs 51,547, after hitting an intraday low of Rs 51,534 against the previous close of Rs 51,715 per 10 gm.
Silver September Futures, traded Rs 334 lower at Rs 67,543 per kg today after they touched an intraday low of Rs 67,501 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.
Commodity traders said investors awaited developments on the US fiscal stimulus by the Federal Reserve policymakers in the US, due this week. Concerns about tensions between the US and China, worries about the sluggish pace of economic recovery also kept investors pessimistic.
Overseas, gold and silver held steady, aided by a weak dollar. Spot gold climbed 0.3% to $1,954.65. Comex gold was trading flat at $1,952.10 per ounce, while US gold futures inched 0.1% lower to $1,959.90. Silver gained 0.6% to $26.92 per ounce.
US dollar, recouped some of its losses from last week, as focus turned towards Fed Chairman's testimony this week. The dollar index was down 0.16% to 92.77 against a basket of six currencies.
Uncertainty about a fresh round of fiscal stimulus from Washington and concerns over tensions between world two largest economies and worries about the sluggish pace of economic recovery have kept trades muted recently.
Similarly, on the equities front, Asian markets were mostly trading lower on Monday after Wall Street declined for the third week and Britain reported a rise in coronavirus infections. Domestic indices too opened on a flat note today, although gained marginally by the first hour of trade. Sensex rose 103 points to 38,949 and Nifty gained 13 points to 11,518.
Investors were also spooked amid a resurgence in COVID-19 infections across the world and European cities announcing new restrictions to curb the pandemic from spreading. Worldwide, there were 312 lakh confirmed cases and 9.65 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.87 lakh and total coronavirus cases stood at 54.87 lakh as of Monday.
Expressing views on gold's trend , Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking said," Despite falling retail sales, slowdown in consumer spending and a weak labor market in US, the Federal Reserve expressed hopes of a paced recovery in the coming months which weighed on the safe haven, Gold. While the US Federal Reserve vowed to keep the interest rates low, no signs of further stimulus infusion to support the economy shackled by the pandemic further limited the gains for Gold.
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 gained to Rs 54,880. Price of 24-carat gold stood at Rs 54,080 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold stood at Rs 51,550 and 53,550, respectively.
Overseas, gold has gained nearly 29% so far this year as near-zero interest rates globally dented hopes of fast economic recovery from the pandemic. Since the beginning of the year, the yellow metal has risen 41.5% to life-time high of Rs 56,191 per 10 gm, hit on August.
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 US."
"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.
Commenting on gold's outlook, Anuj Gupta added," As for today traders can go for buy in gold at Rs 51,500 levels with the stop loss of Rs 51,200 levels for the target of 52,100 levels. They can also go for buy in Silver at Rs 67,500 levels, with the stop loss of 66,800 levels and for the target of 68,500 levels. In the Bullion index Bulldex traders can also go for buy at 16050 with the stop loss of 15850 and for the target of 16250. In international market gold may test $2000 per ounce and silver may test $ 28.50 per ounce soon."