Gold, Silver prices in India on August 24: Gold price in India extended fall on Monday amid mild weakness in global markets as the US dollar strengthened. Rebound in dollar and better US economic activity made investors look for opportunities in risky assets, commodity traders said.
Price of bullion fell as the dollar index held steady against a basket of major currencies after climbing to a more than one-week high in the earlier session.
Gold price fell overseas as equities gained after the US Food & Drug Administration authorised the use of blood plasma from recovered patients as a treatment option for COVID-19. US President Donald Trump said that the plasma treatment cuts the mortality rate by 35%.
MCX
On the Multi-Commodity Exchange, gold September Futures traded 0.52% or Rs 270 lower at Rs 51,745, after hitting an intraday low of Rs 51,720 against the previous close of Rs 52,016 per 10 gm. MCX gold futures currently trade almost Rs 4,471 lower than the lifetime high of Rs 56,191 per 10 gm, hit on August 7.
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 858 or 1.28% lower at Rs 66,210 per kg today after they touched an intraday low of Rs 65,915 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.
Global markets
Overseas, gold and silver prices slipped and traded below the $2,000 mark as the dollar steadied on better than expected US economic data. Dollar rose today after US business activity snapped back to the highest since early 2019 in August as companies in both manufacturing and services sectors saw a resurgence in new orders, data by IHS Markit surveys suggested.
Spot gold was down 0.3% to $1,934.13 per ounce, while Comex gold traded 0.26% lower at $1,929 per ounce. US gold futures eased 0.2% to $1,942.90. Silver eased 0.7% to $26.50 per ounce.
Last Friday, spot gold and silver shed around half a percent in global markets as bleak economic numbers from major economies and fears of slower economic recovery arrested major downside.
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 55,600 per 10 gram. Price of 24-carat gold stood at Rs 55,080 per 10 gram in Chennai. In Mumbai, the rate was Rs 51,970 for 24-Carat gold, as per Good Returns website.
Valuation
As per Geojit Financial Services, if the support of $1880-1900 region continues to hold the downside, expect an upside turn around in prices. However, it needs to close above $1960 to strengthen the momentum.
For MCX Gold August, resistance is placed at 52,600/54,000 and support is at 50,800. For MCX Silver August futures, the resistance is at 69,600 and the support is placed at 64,800/60,800.
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 were 235 lakh confirmed cases and 8.12 lakh deaths from COVID-19 outbreak. Meanwhile, death toll in India crossed 57,000 mark and total coronavirus stood at 31.06 lakh as of Monday.
Gold price discount in India soars to over a month's high
Gold may become cheaper, slumps over Rs 4,000 per 10 gram from dis month's high
Gold vs Reliance Industries stock: Which has given better returns in 2020 so far?