Gold price falls for 2nd day; down Rs 1,600 from record high

Gold, Silver prices in India on August 11: Gold price in Indian commodity market fell for the second straight session on Tuesday in line with muted overseas markets. Gold traders turned cautious, amid rising US-China tensions and correction in dollar, leading to profit booking in the safe-haven asset. The tensions between the world's two largest economies escalated after banning of Chinese apps in the US, that dampened market sentiments for the precious metals. In the latest flare-up in tensions, Beijing has imposed sanctions on 11 US officials.

Gold futures on Multi Commodity Exchange were trading Rs 424 lower at Rs 54,522 per 10 gm against previous close of Rs 54,946 per 10 gm. Gold futures touched an intraday high of Rs 54,570 per 10 gm. The yellow metal has declined Rs 1,669 from its all-time high of Rs 56,191 hit last Friday.

Silver September futures were trading Rs 720 lower at Rs 74,667 per kg today after they touched an intraday high of Rs 75,010 per kg. Silver Futures have hit a lifetime high of Rs 77,949 in last Friday's session.

Gold price trades near record high; silver rises to Rs 75,120

Global markets

Overseas, gold price steadied on Monday after hitting a record high last week.

Spot gold was down 0.5% to $2,017.98 per ounce, moving further away from a record high of $2,072.50 hit last week, while US gold futures fell 0.6% to $2,028.10

Meanwhile, Comex gold was trading 0.49% lower at $ 2,014 per ounce, after hitting an all-time high of 2,063 in the previous week.

This was on the back of bounce in the dollar that rose to a one-week high against the basket of six Asian currencies.

Silver also followed the trend and Silver dropped 0.6% to $28.97 per ounce, after hitting a seven-year high of $29.8384 per ounce last week.

Gold prices were hitting new record highs in global as well as domestic commodity markets last week. Rising coronavirus cases and dampened economic recovery has helped the yellow metal stay in demand. While gold prices have risen more than 33% so far this year, silver has gained 60% in this quarter.

Volatile global equities have also kept demand for the risk-averse asset high. A pause on fiscal aid negotiations in Washington has kept gains in global equities muted.

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Retail gold rate in India

24-carat gold prices in the national capital rose to Rs 55,360 per 10 gram. Price of 24-carat gold stood at Rs 58,480 per 10 gram in Chennai. In Mumbai, the rate was Rs 54,380 for 24-Carat gold, as per Good Returns website.

Valuation

Amid lesser participation of investors in broader equity indices, and more inclination towards precious commodities, many market analysts have turned bullish for the metal.

Geojit Financial said in its note," If prices hold the immediate support of $2002, expect the broad bullish momentum to continue towards $2072 initially followed by $2280 levels later. However, an unexpected turn below $1980 could drag the sentiments lower to $1965 or more."

On MCX Gold contracts, the brokerage estimated resistance at 55,450 and support at 53,700. On MCX Silver August Futures, the resistance is placed at Rs 76200-79000 and support at 72,400

Precious metal prices have been surging to fresh record highs in domestic as well as international commodity markets, amid intensifying economic concerns due to the COVID-19 pandemic. In India, coronavirus cases surpassed 22 lakh mark today, with total deaths standing at 0.45 lakh. Worldwide, there are 202 lakh confirmed cases and 7.38 lakh deaths from COVID-19 outbreak.

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