Gold prices today slipped in global markets and remained on track for its worst month in four years as optimism over a coronavirus vaccine-led economic rebound took some off the safe-haven assets like gold. Spot gold fell 1.2% to $1,766.26 per ounce. For this month, gold was down about 6% – its biggest monthly decline since November 2016.
Silver slipped 3.2% to $21.96 per ounce, while platinum fell 0.9% to $954.64 and palladium was down 0.4% at $2,416.22.
In India, commodity exchange MCX will remain closed for the morning session, from 09:00 am – 5:00 pm, due to a public holiday. Trading will start at 5 pm.
Gold and silver prices continued their fall in Indian markets last week, tracking weak global cues. On MCX, gold futures fell 0.85% on Friday to settle at ₹48,106 per 10 gram while silver futures dropped 1.3% to ₹59,100 per kg. Gold prices in India are down about ₹8,000 from record highs of ₹56,200 hit in August.
“Weighing on gold price is general optimism relating to vaccine for COVID-19, easing political chaos in US amid smooth transition of Biden administration to power and continuing ETF outflows. Gold holdings with SPDR ETF stand near the lowest level since July. We may see choppy trade amid lack of fresh triggers and one should wait for higher levels to create fresh short positions,” Kotak Securities said in a note last week.
Also, bolstering risk sentiment was data that showed China’s factory activity expanded at the fastest pace in more than three years in November.
Covid vaccine optimism drove the dollar to a more than two-year low and put world stocks on course for a record month of gains.
Gold traders will eye Congressional testimony by U.S. Federal Reserve Chairman Jerome Powell this week, for clues on the likely direction monetary policy might take.
Gold is seen as a hedge against inflation likely to result from monetary stimulus. Wall street bank Citi expects bullion’s sell-off to taper in December with support in the mid $1700s. “A renewed push above $2,000/oz in the next 3-6 months seems likely,” the bank added in a note, citing its bearish dollar outlook and low-interest rates as tailwinds. Lower interest rates reduce the opportunity cost of holding non-yielding bullion. (With Agency Inputs)