Gold futures hit a one-month high on MCX. Silver saw increase

On December 21, gold and silver prices increased in Indian markets tracking firm international prices. On Multi Commodity Exchange, gold futures rose by 1.4% and hit a one-month high of Rs 51,009 per 10 gram. Meanwhile, silver futures boosted by 5.4%, which equals Rs 3,600 to Rs 71,549 per kg. Significantly, In the previous session, the yellow metal was up 1.29% or about Rs 96.63 per 10 gram.

Top U.S. lawmakers agreed on a $900 billion COVID economic relief package. Hence, after months of battling and posturing globally, the yellow metal prices increased.

Besides, spot gold boosted by 1.1% and settled at $1,900.57 per ounce. Silver increased by 4.5% and touched $26.93 an ounce. Significantly, the white metal reached its highest since September 18 at $27.02 earlier in the session.

However, a stronger U.S. dollar capped additional gains in the yellow metal. The greenback rose as the worsening pandemic and lack of progress on Brexit trade talks weakened risk appetite.

In the global market, Gold prices resumed their uptrend today as compared to yesterday. Spot gold increased by 1.58% and settled at $1,896.9 per troy ounce. It is 3.27% higher than the average gold price seen in the past 30 days.

Furthermore, among other precious metals, silver prices increased by 3.23%. They touched $26.6 per troy ounce, while Platinum also witnessed gains and boosted by 0.77% and settled at $1,048.5 per troy ounce. Besides, the price of 24-carat gold in the Indian spot market stood at Rs 49,730.

Furthermore, worsening coronavirus outbreaks also overshadowed news that U.S. lawmakers finally have a deal on additional support for American families and businesses.

Gold imports into India declined 40%

Remarkably, the recovery in domestic prices squeezed demand in India. Hence physical gold was sold at a discount last week for the first time in six weeks. According to analysts, dealers offered a discount of up to $1 an ounce over official domestic prices this week down from last week’s premium of $2.5. The yellow metal prices in India include import tax and 3% GST.

Significantly, there was a drop in demand during the coronavirus pandemic. Therefore, gold imports into India declined 40% to $12.3 billion during April-November.

However, the imports hit a year-on-year growth of 2.6% in November to $3 billion. Silver imports during April-November 2020 fell 65.7% to around $752 million. The slump in gold and silver imports has helped in narrowing the country’s trade deficit.