Gold prices in India extended their decline to the third day, in tandem with a drop in global rates as risk sentiment improved. On MCX, June gold futures were down 0.55% to ₹46,068 per 10 gram. Tracking gold, silver futures on MCX also fell 0.5% to ₹47,590 per kg. Apart from global rates and rupee-dollar exchange rate, gold prices in India are influenced by import duty and GST rates.
In global markets, gold prices fell to near two-week low of $1,710.01 per ounce as optimism around several economies re-opening somewhat dulled the metal’s safe-haven appeal. But China-US tensions over Beijing’s proposed new security law for Hong Kong capped the downside for gold.
Among other precious metals, platinum slipped 0.5% to $825.90, and silver inched down 0.1% to $17.08.
US President Donald Trump has said that Washington was working on a strong response to China’s planned national security law for Hong Kong.
Jigar Trivedi, research analyst at Anand Rathi Shares & Stock Brokers, said: “MCX Gold traded negative today even though concerns about the US response to China’s proposed security law for Hong Kong countered optimism about a re-opening of the global economy.”
Despite the pullback in bullion prices, the outlook remains positive for gold, which is seen as a safe-haven asset during political and economic uncertainties, analysts said. In India, gold prices had hit a record high of ₹47,980 per 10 gram earlier this month.
Gold traders will be focusing on comments of US Federal Reserve chairperson when Jerome Powell speaks at a virtual event on Friday.
“Growth worries have fueled hopes of additional stimulus measures by major central banks and governments. US-China have been at loggerheads over various issues like handling of virus outbreak and sovereignty of Hong Kong and and it is unlikely that tensions may subside soon,” Kotak Securities said in a recent note, adding the gold will remain supported due to stimulus expectations and global uncertainties.
(With Agency Inputs)