Gold, Silver prices in India on August 25: Gold price rose on Tuesday amid a mild recovery in global markets as the dollar index retreated from one-week highs. The dollar was trading lower today as investors await release of US new home sales data and US central bank speech, scheduled today. Moreover, rising coronavirus cases globally also helped the commodity recover from recent losses.
India reported more than 60,000 cases for the seventh straight day, taking the death toll to 58,546 and total coronavirus cases reaching 31.67 lakh as of Tuesday. Worldwide, there were 238 lakh confirmed cases and 8.17 lakh deaths from COVID-19 outbreak.
However, prices of precious metals traded volatile, after US FDA approved plasma therapy for COVID-19 treatment. A delay in US-China trade talks and impasse at the stimulus measures from US also kept market participants cautious.
Gold rates globally saw sharp volatility over the last few sessions as dollar index held firm near a more than one-week high hit last week, making gold more expensive for holders of other currencies.
Gold price resumes fall amid strong dollar; silver rates at Rs 65,900
MCX
On the Multi-Commodity Exchange, gold September Futures traded 0.23% or Rs 116 higher at Rs 51,385, after hitting an intraday high of Rs 51,468 against the previous close of Rs 51,269 per 10 gm. MCX gold futures currently trade almost Rs 4,992 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 amid concerns over rising coronavirus cases around the globe. 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 237 higher at Rs 65,802 per kg today after they touched an intraday high of Rs 66,159 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.
Global markets
Precious metals bounced back to gains overseas after the dollar weakened, although coronavirus vaccine hopes kept gains checked. In the international spot market, spot gold hovered above key support of $1930 a troy ounce, after the recent volatility. Comex gold was rising 0.04% higher at $1,927 per ounce. Silver gained 0.3% to $26.62 per ounce.
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 55,320 per 10 gram. Price of 24-carat gold stood at Rs 54,590 per 10 gram in Chennai. In Mumbai, the rate for 24-Carat gold stood at Rs 51,720 as per Good Returns website.
Valuation
As per Geojit Financial Services, while gold price stays above the support of $1880- 1900 region, expect recovery upticks for the day. However, it needs to close above $1960 to strengthen the momentum. A direct drop below $1880 is a signal of weakness.
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For MCX Gold August, resistance is placed at 52,410 and support is at 50,560. For MCX Silver August futures, the resistance is at 69,150 and the support is placed at 64,800/60,800.
On gold's near term outlook, Hareesh V, Geojit's Head of Commodity research said," Optimism surrounding COVID vaccine continues to lift the demand of riskier assets which is weighing the demand of safe assets like gold. A strong US dollar also puts downside pressure on prices. Meanwhile, investors may take a cautious note ahead of the key US central bank speech scheduled on Thursday."
On London spot technical outlook, he added," A break below the stiff support of $1900 is required to continue liquidation pressure for the day. Else, we are likely to see recovery upticks but it needs to break above $2025 to stabilise the momentum."
Investor 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.
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