Gold price today struggle, down ₹6,000 from record highs; silver higher

NEW DELHI: Gold prices struggled today in Indian markets after posting strong gains in the previous session. On MCX, October gold futures rose 0.1% to ₹50,190 per 10 gram while silver futures gained 0.5% to ₹60,730 per kg.

In the previous session, gold prices had risen 1% or ₹502 after struggling for most part of the day. Silver had surged ₹1,360 or 2.3%. As compared to its August 7 highs of ₹56,200, gold has corrected about ₹6,000 per 10 gram. Analysts say that gold is likely to find support at lower levels given the challenges in the global economy.

In global markets, a softer US dollar supported gold prices. Spot gold rose 0.15% to $1,883.69 per ounce, after rising 1.1% in the previous session. Gold traders weighed a fresh US stimulus proposal from the Democrats while looking ahead to the first presidential debate later in the day. Ahead of the November 3 general election, President Donald Trump and former Vice President Joe Biden will square off in their first presidential debate later in the day.

The dollar index was down 0.04% against rivals after registering a sharp fall in the previous session. A weaker dollar makes gold cheaper for holders of other currencies.

Gold prices had seen a sharp fall last week as part of sell-off seen across commodities on back of gains in US dollar. The US dollar index surged to July highs on safe haven buying and increasing concerns about health of European economies, says Kotak Securities.

“Gold is considered a safe haven asset which benefits in times of economic and political uncertainty. While global risk aversion has risen, US dollar is being seen as the preferred safe haven asset and this has pressurized gold,” the brokerage said.

Among other precious metals, silver today fell 0.1% to $23.68 per ounce while platinum fell 0.2% to $880.56.

A minor uptick was seen in gold ETF inflows. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.16% to 1,268.89 tonnes on Monday.

In the US, Democrats released a scaled back $2.2 trillion proposal to extend support to the U.S. economy, seeking to break an impasse with Republicans on Covid-19 relief. US House of Representatives Speaker Nancy Pelosi did not say when there would be a vote on the latest proposal.

“The recent sell-off in gold and silver dampened market sentiment. However we do not expect a sustained decline in gold owing to persisting challenges to global economy. If gold price recover, silver may also bounce back,” Kotak Securities said.

(With Agency Inputs)