Gold and silver prices in India today fell sharply, extending losses to the third day. On MCX, October gold futures were down 1.2% to ₹49,764 per 10 gram while silver futures plunged 4% to ₹58,851 per kg. Precious metal prices have fallen sharply this week across the globe as investors sought the safety of US dollar. Gold prices fell about ₹100 in the previous session, extending Monday’s ₹1,200 drop. Silver had also edged lower on Tuesday, adding to its Monday’s ₹6,000 loss.
As compared to last month’s highs of ₹56,200, gold is now down over ₹6,000 per 10 gram in India.
In global markets, gold prices were little changed today weighed down by a strong US dollar. On the other hand, renewed U.S.-China tensions and concerns over economic recovery helped support the yellow metal at lower levels. Spot gold was little changed at $1,902.04 per ounce. Among other precious metals, silver fell 0.6% to $24.26 per ounce, platinum rose 0.3% to $869.64 and palladium slipped 0.8% to $2,203.15.
The dollar index hit an eight-week peak against other currencies. A firmer dollar makes gold more expensive for holders of other currencies.
Gold is considered a safe-haven asset which benefits in time of economic and political uncertainty. But despite weaker risk sentiment, gold prices have trended lower this week as investors sought the safety of US dollar and moved out of commodities and equities.
Analysts say that while US dollar is seen as the preferred asset at present, gold may also benefit from safe haven buying if global risks continue to intensify.
“We expect buying to emerge at lower levels as concerns about US economy may limit upside in US dollar,” Kotak Securities said in a note.
To control the spread of coronavirus, the UK has imposed fresh set of curbs to tackle a second wave of COVID-19.
Investors remained on the sidelines despite the recent price drop. ETF Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.05% to 1,278.23 tonnes on Tuesday. (With Agency Inputs)