05 June 2020

Gold prices fall sharply today, a day after growing ₹700 per 10 gram

  • Gold prices have fallen sharply since hitting a record high of about ₹48,000 per 10-gram last month
  • In global markets, gold prices are set for a third weekly drop
Photo by Git Stephen Gitau from Pexels

Gold prices today fell sharply in Indian markets amid an improvement in risk sentiment as the government announced more steps to reopen the economy. On MCX, gold futures fell 0.7% to ₹46,369 per 10 gram, a day after surging about ₹700 per 10 gram. Tracking gold, silver futures on MCX also declined sharply, falling 0.8% to ₹48,402 per 10 gram. Silver had gained 0.64% in the previous session. Domestic equity markets were firm in early trade.

The health ministry has issued standard operating procedures to be followed by shopping malls, restaurants, hotels and offices to contain the spread of COVID-19 as India further reopens the economy from June 8.

In global markets, gold prices however edged higher on a weaker US dollar and a pause in the recent rallies in global equity markets. Spot gold was up 0.2% at $1,714.78 per ounce. However, gold was set for a third consecutive weekly drop. The dollar index has fallen over 1.5 percent in this week, making gold more cheaper for holders of other currencies.

Gold traders will be watching US nonfarm payrolls data due later in the day. Meanwhile, the European Central Bank approved a greater-than-expected expansion of its stimulus package on Thursday, June 4.

“A weak US Dollar and lingering US-China tensions continuously support gold’s haven shouted. Meanwhile, investors may take a cautious stance on hopes of a quick economic turnaround and key US employment data scheduled today,” said Hareesh V, head of commodity research at Geojit Financial Services.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings, dipped 0.1% to 1,132.21 tonnes on Thursday.

Among other precious metals, platinum today climbed 0.4% to $840.39, while silver was trading flat at $17.72. (With Agency Inputs)