In Indian markets, precious metals decreased. Thus, tracking softer global rates as chances of a U.S. stimulus package rolled out before the November elections faded. On Multi Commodity Exchange, December gold futures dropped by 0.4% and settled at ₹50,360 per 10 grams. Metals fell for the second day in three days. Moreover, December silver futures declined 0.9% and touched to ₹61,064 per kg. in the previous session. The Gold had increased by 0.5% while the white metal had risen 1.6%.
Significantly, in the global market, the yellow metal prices decreased as a steady U.S. dollar weighed on Gold. Moreover, spot gold dropped 0.4% and touched $1,893.17 per ounce.
At the same time, the U.S. dollar index increased to 93.435, drawing support from rising coronavirus cases and scant progress towards the U.S. stimulus deal.
According to Steven Mnuchin, U.S. Treasury Secretary, getting a fiscal stimulus deal before next month’s election would be difficult, which weighed on global equities.
Silver decreased 1% and settled at $24.05 per ounce, while platinum lost 0.3% and touched $854.59 per ounce.
According to Hareesh V, Head of Commodity Research and Geojit Financial Services, fading optimism of an instant U.S. economic stimulus package and a dollar rebound continue to drop gold prices. However, increasing COVID-19 pandemic worries and geo-political tension may raise the safe-haven demand and, thus, the commodity’s value.
Besides, analysts reported that volatility in yellow metal prices also pushed ETF investors to the sidelines.
Gold may face choppy trade
As reported by Kotak Securities, Gold may face choppy trade until there is more clarity on U.S. stimulus. However, Kodak Securities maintain buy on dips view as concerns about the U.S. economy’s health may keep a check on the U.S. dollar. Besides, growing virus risks may boost safe-haven demand for Gold.
Gold investors were also observing the U.S. presidential campaign, with polls pointing Democratic candidate Joe Biden leading the race.
Significantly, in Europe, France imposed new restrictions in leading cities. Moreover, Germany warned of the epidemic’s economic risks, as Europe’s leaders pointed efforts to stem an unrelenting wave in coronavirus cases.
Gold, a hedge against inflation and currency debasement, has risen approximately 25% this year among the unprecedented global stimulus levels to reduce the economic blow from the epidemic.
Metals Focus, a consultancy, told that the world’s mines would produce 3,368 tonnes of the yellow metal this year, down 4.6% from 2019 and the lowest in 5 years. But high metal prices will help increase output by 8.8% to a record 3,664 tonnes in 2021