New Delhi: Gold prices fell sharply in India on Friday tracking a decline in global markets. On MCX, gold futures fell 1% or about ₹500 to ₹51,280 per 10 gram.
Silver futures slumped ₹1,056 to ₹67,926 to per kg. Both gold and silver have fallen sharply after hitting record highs of ₹56,200 and about ₹80,000 last month. On a week-on-week basis, gold prices are however up about ₹700 per gram.
Analysts say that covid vaccine developments and improving economic data present near-term headwinds to gold but low and negative interest rates, weaker US dollar and expectations of further stimulus will keep gold supported.In global markets, gold futures on Friday dropped about 0.7% to $1,950.20 an ounce.
Gold prices dipped on Friday after the European Central Bank stopped short of offering any concrete signals on further stimulus. Also, the US Senate blocked a Republican bill that would have provided around $300 billion in new coronavirus aid. Gold is perceived as a hedge against inflation and currency debasement.
“Gold prices consolidated and remained at steady levels even when Nasdaq plummeted,” says Nirali Shah, Senior Research Analyst, Samco Securities, referring to the sellloff in US tech stocks.The Nasdaq 100 on Friday fell for the fifth time in seven days to cap its worst week since March. The tech-heavy index is down 11% from its September 2 record.
In India, gold ETFs saw an inflow of ₹908 crore in August, the fifth month of inflow in a row. This takes the net inflow in gold exchange traded fund or ETF category to ₹5,356 crore in January-August period of 2020.
Latest data show that the Reserve Bank of India’s gold reserves rose by $321 million in week ended September 4 to $37.521 billion.
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