Gold, Silver prices in India on August 19: Gold price in India fell after two sessions of gain on Wednesday amid mild weakness in global markets as the US dollar strengthened. Gold fell 4.5% last week in its biggest decline since March amid appreciation in the US dollar.
The dollar rose marginally this morning after trading near two-year lows on the back of cautious traders, ahead of minutes from the US Federal Reserve's policy meeting, set to release this week.
Lingering concerns over a US coronavirus stimulus bill have also kept investors pessimistic. Both Democrats and Republicans have indicated they are at a stalemate over a new stimulus package.
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MCX
On the Multi-Commodity Exchange, gold September Futures traded 0.57% or Rs 305 lower at Rs 53,266, after hitting an intraday low of Rs 53,125 against the previous close of Rs 53,571 per 10 gm. MCX gold futures currently trade almost Rs 2,925 lower than the lifetime high of Rs 56,191 per 10 gm, hit on August 7.
The yellow metal has risen 35.2% since the beginning of this year amid concerns over rising coronavirus cases around the globe. On MCX, the yellow metal has risen 41.5% to the life-time high since the beginning of the year. Bullion that was trading at Rs 39,000 on December 31, 2019, recently hit a lifetime high of Rs 56,191 per 10 gm on August 7, 2020.
Similarly, Silver September futures were trading Rs 955 lower at Rs 68,550 per kg today after they touched an intraday high of Rs 70,499 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.
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Global markets
Overseas, gold and silver prices fell today after gaining 3% this week and traded near the $2,000 mark as the dollar steadied. Investors also awaited minutes from the US Federal Reserve's last policy meeting.
Spot gold was down 0.4% at $1,993.68 per ounce, while Comex gold traded flat at $1,999 per ounce, its previous settlement after hitting $2,063 earlier this week. US gold futures fell 0.5% to $2,002.50. Silver eased 0.3% to $27.58 per ounce.
Prices of the bullion metal fell upto 4.5% last week after the dollar had gained some ground and as US-China tensions continued to weigh on investor sentiment. Earlier on Monday, US President Donald Trump's administration announced further tightening of restrictions on Huawei, aimed at limiting the Chinese telecommunications giant's access to commercially available chips.
Amid the coronavirus-driven slowdown, fuelling fears of inflation and currency debasement, Comex gold has risen almost 36% to touch an all-time high of $2,063 per ounce hit on August 5, 2020, from lows of $1,517 per ounce, registered on 31 December 2019.
Retail gold rate in India
24-carat gold prices in the national capital traded at Rs 55,100 per 10 gram. Price of 24-carat gold stood at Rs 56,370 per 10 gram in Chennai. In Mumbai, the rate was Rs 53,220 for 24-Carat gold, as per Good Returns website.
Valuation
As per Geojit Financial Services, inability to break $2020 intraday bias most likely to be on the lower side. However, support is seen at $1960 which needs to be cleared for the continuation of the trend. A direct rise above $2022 would lift prices much higher later.
For MCX Gold August, resistance is placed at 54,000 and support is at 51,400. For MCX Silver August futures, the resistance is at 71,500/74,980 and the support is placed at 65,100/60,800.
Commenting on Gold's outlook, Hareesh V, Head Commodity Research at Geojit Financial Services said," A weak US currency and expectations of more economic easing measures amid slow global growth continue to lift the safe-haven demand of gold. However, an intermittent profit booking cannot be ruled out on signs of easing US-China trade tensions and optimism about coronavirus vaccine."
On London spot technical outlook, he added," A direct break of $2020 is required to continue the bullish outlook, else intraday bias largely on the downside. However, major downside moves are likely only if prices break $1970."
Investors' interest in gold has risen ever since central banks globally embarked on unprecedented financial stimulus to combat the Covid-19 pandemic related economic headwinds. This has caused investors to use the bullion metal as a hedge against inflation and currency debasement.
Worldwide, there are 223 lakh confirmed cases and 7.84 lakh deaths from COVID-19 outbreak. Meanwhile, the death toll in India crossed 53,000 mark and total coronavirus stood at 27.68 lakh as of Wednesday.
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