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Gold price slips for fourth day, silver rates at Rs 56,500

Rupa Burman Roy     September 24, 2020

Gold, Silver prices in India on September 24: Gold prices continued to decline on Thursday and traded below the key psychological level of 50K in the Indian commodity market for the second session in a row. Investors were concerned about the fresh coronavirus-induced curbs, globally denting hopes of a swift economic recovery.

Amid concerns over fresh rounds of coronavirus-induced lockdowns across Europe and Britain, precious metals continued falling for the fourth straight session overseas.

The slump in global rates of the bullion metal was on the back of firm dollar that continued with upward momentum over the uncertainty of the next stimulus package by the US government.  

On gold falling below Rs 50,000/10gm, Nish 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."

" 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."

"Going forward, clarity on fiscal stimulus in the US, control on the number of COVID cases worldwide, or a vaccine will guide gold prices," he said.

Gold price slips for second day; silver rates fall sharply to Rs 58,000

On the Multi Commodity Exchange, Gold October Futures fell Rs 166 at Rs 49,342, after hitting an intraday low of Rs 49,248 against the previous close of Rs 49,508 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. However, the bullion now trades almost Rs 6,000 lower than its lifetime high hit last month.

Silver September Futures, traded Rs 1,800 lower at Rs 56,668 per kg today after they touched an intraday low of Rs 56,020 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.

In the international market, gold continued weakness for the fourth straight session and fell to its lowest level in more than two months. Meanwhile, the dollar index climbed to more than eight-week high, making bullion more expensive for holders of other currencies.

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Spot gold fell 0.4% to $1,855.72 per ounce. Comex gold was trading flat at $1,859 per ounce, while US gold futures were down 0.3% to $1,863.60. Silver fell 5.3% to $21.66 per ounce.

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 has kept trades muted recently.  Traders said investors also awaited weekly jobless claims data out of US, due to be released later in the day.

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 the retail front, physical 24-carat bullion per 10 gram in the national capital fell to Rs 53,470. Price of 24-carat gold stood at Rs 52,480 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold stood at Rs 50,010 and 52,080, respectively.

Worries about the sluggish pace of economic recovery due to the spread of pandemic worldwide have again turned market investors pessimistic. Worldwide, there were 321 lakh confirmed cases and 9.82 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 57-lakh mark and the death toll from COVID-19 infections rose to 0.91 lakh, while over 46 lakh people recovered from the disease.

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, US 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."

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