Gold Prices Today Dip, Down ₹8000 From All-Time Highs, Silver Edges Up

Gold Prices Today : Gold and silver prices were mixed today in Indian markets, tracking flat global rates. On MCX, gold futures dipped 0.1% to ₹48,846 per 10 gram while silver gained 0.5% to ₹65,760 per kg.

In the previous session, gold prices today had finished 0.36% higher, after hitting the lowest level in over a month, while silver had advanced 1%. In global markets, gold rates today inched higher as traders awaited comments from Treasury Secretary nominee Janet Yellen on the dollar and stimulus.

  • After over 25% gains in 2020, gold prices in India are down over 2% so far this year
  • In the previous session, gold had hit the lowest level in over a month

Spot gold rose 0.1% to $1,838.51 per ounce after prices dipped to over one-month low in the previous session.

Treasury Secretary Janet Yellen will testify today on Capitol Hill the day before Joe Biden takes office as President. Last week, Biden had proposed a $ 1.9 trillion stimulus package to help boost the virus-hit economy.

Among other precious metals, silver fell 1.1% to $ 25.05 an ounce, platinum fell 1.3% to $ 1,092.65 and palladium fell 0.3% to $ 2,364.

“Hopes for further stimulus measures from the new US administration and increasing virus cases continue to support the gold price. The strengthening of the US dollar and solid global stocks should limit the strong price gains,” said Hareesh V, Research Head Commodities at Geojit Financial Services.

As long as prices hold the $ 1,800 support, he says, “We can expect prices to fall. However, it has required breaking $ 1,870 to add momentum. The immediate downtrend point is at $ 1,780 -Dollar.”

After a stellar gain in 2020, global gold rates have fallen more than 3% this year as US Treasury and Dollar yields on expectations that coronavirus vaccines and stimulus packages will support economic recovery , have increased. In August gold hit a record high of £56,200 in Indian markets.

The dollar index was slightly lower today at 90.672 after rising for the past two weeks.

“The US dollar has recently plummeted through April 2018, but has seen some relief in the past few days as market participants assessed the political changes in the US. President-elect Joe Biden last week presented a proposal for a stimulus package in US $ 1.9 trillion dollar amount unveiled to boost the economy and speed up the US response to the coronavirus pandemic.

While stimulus measures will help fuel economic growth, market participants are concerned about the US response Congress approved or not. In addition, market participants are also concerned about how the stimulus package will be funded, “Kotak Securities said in a note.

However, analysts say gold continues to be backed by increasing virus cases around the world, which has forced authorities to impose stricter restrictions in many parts of the world. Mixed economic data from major economies also show an uneven pace of recovery. Gold is still holding above $ 1800 / ounce while silver trades above $ 24 / ounce.

“With just a few days in 2021, volatility in financial markets has increased, as evidenced by mixed asset class trading. Last week we saw stocks and commodities come under pressure as the US dollar strengthened as a market participant moving up Political changes being prepared in the US, Joe Biden will take office as US President, “said Kotak Securities.

Why gold price is down today?

Technically Gold market is under short covering as market has witnessed drop in open interest by 7.01% to settled at 6867 while prices up 192 rupees.

Gold yesterday settled up by 0.39% at 48894 on the prospect of extended U.S. fiscal stimulus and accommodative monetary policies.

US government will provide more economic stimulus and also the policy of the U.S. Federal Reserve is unlikely to become more hawkish going forward.

U.S. President-elect Joe Biden outlined a $1.9 trillion stimulus package proposal last week to jump-start the economy and accelerate the distribution of COVID-19 vaccines.

Fed Chair Jerome Powell also said there was no reason to alter the central bank’s highly accommodative stance with the U.S. economy still far from its inflation and employment goals.

Although U.S. inflation expectations have risen in anticipation of more U.S. fiscal stimulus, gold has not been the sole beneficiary – bond yields have risen and weighed on gold.

Hedge funds and money managers reduced their bullish positions in gold COMEX contracts in the week to Jan. 12, the U.S. Commodity Futures Trading Commission (CFTC) said.

Physical gold in China was sold at a small premium for the first time since early 2020, as demand picked up ahead of the Chinese new year. Dealers in China offered premiums of $0.50-$4 an ounce over benchmark spotgold prices. In India, dealers charged premiums of up to $0.50 an ounce, down from last week’s premium of $1.50.

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

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