Gold price trading flat after five sessions of fall; silver rates at Rs 68,500

Gold, Silver prices in India on August 17: Gold price in Indian commodity market traded flat after falling for five consecutive sessions on Monday amid a mild recovery in global markets over the news of potential improvement in the Sino-US trade relationship.

Overseas, gold and silver prices recouped from the worst fall in seven years and traded flat today as investors digested news over the US-China stimulus negotiations and US stimulus talks. Although, the strengthened dollar caused pullback to red territory.

Gold premiums drop in India amid falling prices

MCX

The yellow metal traded flat after minor decline early morning and traded 0.10% or Rs 53 higher at Rs 52,280, after hitting an intraday high of Rs 53,340 against the previous close of Rs 52,227 per 10 gm. MCX gold futures trade almost Rs 3,851 lower than the lifetime high of Rs 56,191 per 10 gm, hit on August 7.

Silver September futures were trading Rs 1,141 higher at Rs 68,312 per kg today after they touched an intraday high of Rs 68,470 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.

Global markets

Overseas, gold and silver prices stayed flat on Monday, after their worst week in five months. Spot gold was down 0.1% at $1,952.01 an ounce, after falling 4% so far this week, its biggest weekly percentage fall since early March. Comex gold was flat at $1,956 per ounce. US gold was trading 0.5% to $1,960.50.

Gold prices fell 4.5% last week. Amid the coronavirus-driven slowdown, the bullion metal has been on a continuous rise in 2020, gaining about 28% value.

Silver slipped 0.6% to $26.25 per ounce.

Rising US and China tensions and correction in the dollar continue to weigh on investor sentiment, leading to profit-booking in the safe-haven asset. Gold price continued slipping last week as the dollar gained some ground. A planned US-China trade deal review initially set for Saturday, August 15, was delayed with no new date agreed upon on back of scheduling conflicts as well as to give time for more Chinese purchases of US exports. Investors have also turned cautious over the stalled US stimulus talks, adding to uncertainty over the recovery.

Retail gold rate in India

24-carat gold prices in the national capital traded at Rs 55,110 per 10 gram. Price of 24-carat gold stood at Rs 55,670 per 10 gram in Chennai. In Mumbai, the rate was Rs 52,250 for 24-Carat gold, as per Good Returns website.

Gold prices may hit Rs 65,000 level by Diwali; silver likely to touch Rs 90,000-mark

Valuation

Commenting on Gold's outlook, Hareesh V, Head Commodity Research at Geojit Financial Services said," Signs of easing US-China trade tensions and hopes of a rebound in the US dollar are likely to weigh on the safe-haven demand of the metal in the immediate run. However, slow global growth prospects amid the rising threat of pandemic continue to provide support to the broad bullish outlook of the commodity."

On London spot technical outlook, he added, "If there is Inability to break the intraday upside hurdle of $1970, we can expect sell-offs to continue in the counter. Else, recovery rallies are likely to be towards $2080 or even more. A direct drop below $1880 could negate the bullish outlook and take prices lower."

As per Geojit Financial Services, broad bias is still on the bullish side, but a sustained trade above $1980 is required to continue upticks for the day. Else, likely for corrective selling pressure towards $1860 followed by $1780 levels later.

For MCX Gold August, resistance is placed at 53,250 and support is at 51,400/49,200. For MCX Silver August futures, the resistance is at 71,500/74,980 and the support is placed at 60,800.

As per analysts, both equities and commodity markets have turned mixed as investors remained wary over the uncertainty regarding the fresh US economic relief, the outcome of the US-China trade talks and worsening coronavirus crisis. Worldwide, there are 218 lakh confirmed cases and 7.73 lakh deaths from COVID-19 outbreak. Meanwhile, India continues to see a rising number of coronavirus cases, with death toll crossing 50,000 and total coronavirus standing at 26.5 lakh as of Monday.

Gold Imports

India's gold imports plunged 81.22 per cent to $2.47 billion (about Rs 18,590 crore) during April-July quarter of 2020-21, Commerce Ministry data showed. The decline in gold and silver imports has helped in narrowing the country's trade deficit to USD 13.95 billion during Q1 FY21 as compared to $59.4 billion in the same period last year.

Gold imports plunge 81% to $2.47 billion during April-July

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