Gold, Silver prices in India on September 23: Gold price fell for the second session on Wednesday as investors reacted to the comments from Federal Reserve officials on the state of economy.
Precious metals continued weakness after bullion prices slipped to more than one month low as the dollar gained.
Gold and silver prices turned red on a firm dollar and as investors were concerned about the fresh coronavirus-induced curbs, denting hopes of a swift economic recovery.
On the Multi Commodity Exchange, Gold October Futures fell Rs 590 at Rs 49,788, after hitting an intraday low of Rs 49,744 against the previous close of Rs 50,381 per 10 gm. Since the beginning of the year, the yellow metal has risen 41.5% to life-time high of Rs 56,191 per 10 gm
Silver September Futures, traded Rs 2,923 lower at Rs 58,280 per kg today after they touched an intraday low of Rs 58,085 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.
In international market, gold eased for the third session today, as the dollar climbed to a near two-month high, making bullion more expensive for holders of other currencies. Amid concerns over fresh rounds of coronavirus-induced lockdowns across Europe and Britain, spot gold fell 0.2% to $1,894.69 per ounce. Comex gold was trading flat at $1,898.60 per ounce, while US gold futures were down 0.5% to $1,898. Silver fell 1.5% to $24.05 per ounce.
Concerns about tensions between the US and China also renewed with President Donald Trump telling the United Nations General Assembly that China must be held accountable for the COVID-19 outbreak.
Worries about the sluggish pace of economic recovery also kept investors pessimistic. Chicago Federal Reserve President Charles Evans warned that the economy risks a longer, slower recovery and recessionary dynamics if Congress fails to pass an additional fiscal stimulus package.
He added that economy had shown marked improvement since the pandemic drove it into recession, but the path ahead remains uncertain and the U.S. central bank will do more if needed
Uncertainty about a fresh round of fiscal stimulus from Washington and concerns over tensions between world's two largest economies and worries about the sluggish pace of economic recovery have kept trades muted recently.
MCX precious metals too showed a similar move as spot gold prices in the international market, correcting almost 2% in the last two sessions.
On yesterday's trend, Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking said," On Tuesday, Spot gold ended lower 0.69 per cent to close at $1899.3 per ounce as the U.S. Dollar appreciated to its highest is two months making the yellow metal expensive other currency holders. Spot silver dipped over 1.2 per cent yesterday to close at $24.4 per ounce while prices on the MCX ended lower by 0.17 per cent closing at Rs.61213 per kg."
Similarly, on the equities front, global markets were also mixed today the potential worsening of the coronavirus pandemic. Market benchmarks Sensex and Nifty reversed from early gains and fell for the fifth consecutive session on Wednesday, amid weak global cues. Sensex was trading 189 points lower at 37,544 and Nifty declined 70 points to 11,083.
On the retail front, physical 24-carat bullion per 10 gram in the national capital fell marginally to Rs 54,010. Price of 24-carat gold stood at Rs 53,240 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold stood at Rs 50,640 and 52,450, respectively.
Investors were 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 317 lakh confirmed cases and 9.75 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.90 lakh and total coronavirus cases stood at 56.46 lakh as of Wednesday.
On Gold falling below Rs 50,000/10gmNish Bhatt, Founder & CEO, Millwood Kane International said,"The dream run for Gold has hit a roadblock, after hitting life highs of over Rs 56,000/10gm last month, the yellow metal has been falling. Internationally, Comex Gold is trading below the $1900/oz level."
He added,"The primary reason for the fall in gold prices is the rally in the Dollar index, uncertainty over the next stimulus package by the US government to help give a push to the slowing growth rate. While the Dollar index is near an 8-week high against the other currencies in the basket. As gold is an international commodity and a rally in the US Dollar affects its prices. Further stimulus is crucial as the Fed chairman in its testimony to Congress said that more government spending will be required to sustain the growth rate. Fears of a second lockdown in Europe is also one of the reasons for the fall in Gold."
Anuj Gupta from Angel Broking said, "Meanwhile, no signs of further stimulus infusion by the U.S. policymakers to support the economy shackled by the pandemic further pressurized Gold prices. However, U.S. policymaker vowed to support the small businesses hit by the coronavirus-triggered slowdown. Markets will keep an eye on the U.S. Federal Reserves' official's assessment of the current scenario in the world's largest economy. The fall in gold prices was limited as reinforcement of lockdown in the Eurozone reflecting the alarming increase in Covid-19 cases dampened hopes of economic recovery."
On gold's near term support and resistance, he added," As for today traders can go for sell in gold at Rs 50,200 levels with the stop loss of Rs 50,550 levels for the target of 49,600 levels. They can also go for sell in Silver at Rs 61,000 levels, with the stop loss of 61,800 levels and for the target of 59,500 levels.
Hareesh V, Geojit's Head of commodity research said," Gold may continue to be supported by renewed US-China tensions and hopes of fresh economic stimulus measures amid rising virus cases across the globe. However, a robust US dollar and optimism over Covid vaccine continue to hit the safe-haven demand of the commodity."
On Spot gold intraday technical outlook, the brokerage said prices continue to trade in a tight range of $1880-1975 an ounce. As long as prices hold the support of $1880 expects recovery momentum for the day. However, a direct drop below the same would continue the liquidation pressure towards $1840 or even more. For MCX Gold Oct futures, the brokerage said resistance is placed at Rs 51820 and support at Rs 49840.