Mumbai: Gold prices in India edged lower today, bucking a rise in global rates. On MCX, June gold futures fell 0.25% to ₹46,416 per 10 grams, their third fall in four days. In the previous session, gold had risen 0.27%. Silver rates also edged lower, with July futures on MCX declining 0.2% to ₹48,310 per kg, following a 1.2% surge in the previous session. Gold prices in India include 12.5% import duty and 3% GST. Earlier this month, gold rates in India had hit a record high of ₹47,980 per 10 gram and since then have remained volatile.
Jewellery shops have reopened in some parts of the country, news agencies reported, after being shut for nearly two months. Coronavirus crisis and high prices are likely to hurt demand. In global markets, gold prices moved higher amid escalation in US-China tensions over a Hong Kong security law. Spot gold was up 0.2% at $1,711.35 per ounce after it fell to a two-week low in the previous session. Gold also drew support from fresh stimulus measures announced by many countries. Among other precious metals, platinum gained 1.9% to $834.19, while silver fell 0.4% to $17.24.
US President Donald Trump is considering possible responses to China’s plans to impose a national security law on Hong Kong, including visa and economic sanctions, a top US official said. The European Union on Wednesday unveiled a $826.13 billion stimulus plan to prop up economies hit by the coronavirus pandemic. Gold is typically considered a hedge against inflation and currency debasement.
Gold continued to see an uptick in investment demand. The holdings of SPDR Gold Trust holdings, the world’s largest gold-backed exchange-traded fund or ETF, rose 0.2% to 1,119.05 tonnes on Wednesday. “Gold has corrected sharply from recent highs in global markets. However, we may see extended losses only if price breaks below $1700/oz level. We expect buying interest to emerge at lower levels as US-China tensions continue to rise,” Kotak Securities said in a note.
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