Gold and silver prices in India edged lower today, as elusive US stimulus package and a stronger US dollar put pressure on the yellow metal. On MCX, December gold futures fell 0.3% to ₹50679 per 10 gram while silver futures plunged 1.12% to ₹61,749 per kg. In recent weeks, gold has remained in a narrow range, after losing momentum since hitting record high of ₹56,200 per 10 gram in August. In the previous session, gold had inched up 0.2% while silver had declined 0.3%.
In global markets, gold rates fell today to an one-week low as the US stimulus package remained elusive and the dollar strengthened. But the losses were limited as US reported record coronavirus infections. Spot gold fell 0.1% to $1,899.41 per ounce, after hitting $1,890 earlier in the session. Among other precious metals, silver fell 0.5% to $24.45 per ounce, while platinum dipped 0.7% to $895.
Gold traders remained focused on the chances of an agreement on a stimulus package as November’s election fast approaches. US House Speaker Nancy Pelosi said she is not giving up on passing another coronavirus relief economic package before the November 3 election. Pelosi says she sent the administration a list of concerns on Friday and she is told that she’ll have answers on Monday.
The dollar index was up 0.16% against a basket of currencies, putting pressure on gold. The dollar was stronger as rising virus cases and lack of progress towards a U.S. stimulus package put traders in a cautious mood.
“Gold continues to trade within recent range. The dollar index managed to note modest gains gaining support from worsening outlook for European economies amid rising virus cases and mixed economic numbers,” Kotak Securities said in a note.
“While trend in US dollar has been the major price determining factor for gold, the metal remains supported by safe haven buying amid increasing challenges to global economy in form of rising virus cases, uneven recovery, US-China tensions and uncertainty relating to US elections,” the brokerage added.
Gold ETF investors continued to remain on the sidelines. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund or gold ETF, fell 0.14% to 1,263.80 tonnes on Friday.
In India, however, gold premiums in India last week jumped to their highest in nearly three months last week, as jewellers continued to stock up as the festive season gathers pace.
Kotak Securities maintains a buy-on-dips view on gold. “We may see choppy trade in gold along with other asset classes as market players react to development relating to US stimulus. However, we maintain buy on dips view as concerns about US economy and US election uncertainty may keep pressure on US dollar.” (With Agency Inputs)
