Gold may become cheaper, slumps over Rs 4,000 per 10 gram from this month's high
BusinessToday.In August 22, 2020
Gold and silver prices in the Indian markets, ended on a weak note this week in the wake of softer global rates. Talking about gold, the yellow metal's prices slumped by over Rs 4,000 per 10 gram this week from August 7th highs of around Rs 56,200, owing to a broader bullish outlook.
Gold prices in India kept fluctuating this week. According to data by India Bullion and Jewellers Association Ltd (IBJA), gold price fell Rs 346 to close at Rs 51,973 per 10 gram on August 21. It further shows that the yellow metal became cheaper by Rs 901 between August 17 to August 21, whereas silver dipped by Rs 1,660 during the same 5-day duration.
On MCX, October gold futures dipped 0.3 per cent to Rs 52,001 per 10 gram on Friday while September silver futures fell by 1 per cent to log Rs 66,954 per kg. However, on a week-on-week comparison, gold and silver prices mostly remained flat.
According to market experts, the price of gold may fall further in the coming days in the wake of a strong rebound in dollar and positive expectations from the upcoming US fiscal stimulus package.
Spot gold dipped to $1,942 an ounce in US markets on Friday. The prices of the yellow metal saw a steep slump from over $2,000 hit earlier this week in the wake of a bounce in the US dollar, and real rates as well as delayed stimulus package agreement.
On Friday, the Nasdaq and S&P 500 clocked record highs while the dollar busted an eight-week losing streak against several currencies, aided by a bounce in US business activity and home sales.
A stronger dollar makes gold more costly for those holding other currencies.
According to Hareesh V, Geojit's head of Commodity research, "rising equity market and optimism over COVID-19 vaccine are likely to trigger higher level profit booking in gold", however, "broad bullish outlook remains intact due to uncertainties surrounding the global economic recovery, hopes of fresh measures from central banks and a weak dollar."
Meanwhile, gold traders are keeping a close eye on developments around the US coronavirus relief bill after US House of Representatives Speaker Nancy Pelosi, on Thursday, expressed that she opposed a smaller (coronavirus) relief bill.