In India, gold prices had finally declined on the Multi Commodity Exchange (MCX) and tracking weakness in the international spot prices as the US dollar gained.
Gold futures for February at 11:55 AM, delivery fell by 0.41 percent to Rs 48,664 per 10 grams as opposed to the previous close of Rs 48,865 and opening price of Rs 48,700 on the MCX. Silver futures were traded by 1.12 percent lower at Rs 65,790 per kg. The prices were opened at Rs 66,000 as compared to the older close of Rs 66,536 per kg.
Amit Sajeja, who is the Vice-president of Commodities and Currencies at Motilal Oswal, said that the gold prices have been correcting recently and this trend still continued today.
On Thursday, the international gold slipped as the investors started to shift to the safety of the dollar following an equity sell-off, while the US Federal Reserve flagged concerns around the pace of the recovery in the world’s largest economy and it lent further support to the greenback, according to a Reuters report.
However, Fed Chairman Jerome Powell said that the risks are in the near term just as the vaccine program gears up and many new variants threaten to spread more quickly. There is also good evidence to support a stronger economy in the latter part of this year. Global demand for gold, on the other hand, fell to its lowest in 11 years in 2020 due to covid 19, following which a huge stockpiling by investors was triggered, according to a report by the World Gold Council.
On the domestic front, India’s gold consumption has also been expected to rebound in 2021 after falling to its lowest in 26 years. According to Kedia, gold might be able to find support at Rs 48,380 level. Silver also looks very weak in tracking base metals, according to him. Silver is at Rs 64,800 level, while resistance is at Rs 67,200 level.