Gold prices fall today after rising ₹500 per 10 gram, silver rates soften

Gold prices in India fell today after a sharp rise in the previous session. On MCX, gold futures prices were down 0.27% to ₹38,475 per 10 gram, after rising 1.31% or ₹500 in the previous session. Silver also struggled today. On MCX, prices of silver contracts fell 0.30% to ₹46,635 per kg. The metal had surged 1.5% to ₹46,795 in the previous session. In spot markets, gold, however, showed a firm trend as prices of 24-carat gold rose ₹180 to ₹39,395 per 10 gram in the national capital on firm global trends, according to HDFC Securities.

On Thursday, gold had closed at ₹38,214 per 10 gram.

“Spot gold prices for 24 karat gold in Delhi were traded higher by ₹181 reflecting overnight gains in the global prices,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

Silver prices also increased ₹270 to ₹47,900 per kg, from ₹47,630 per kg at the close of the previous trade.

In global markets, gold traded flat at $1,512.54 per ounce and is set to extend gains to the second week in a row. Spot gold prices are up about 0.5% so far this week after a 1% gain the previous week in global markets.

A rate cut from the Federal Reserve and a weaker dollar has helped lift gold prices in global market. Though the US Federal Reserve cut interest rate for the third time this year on Wednesday, it signaled a pause in future rate cuts. “While Fed’s stance is negative for gold, it was factored in to some extent. Meanwhile, global growth concerns, US-China trade conflict and loose monetary policy stance may keep pressure on Fed to act again,” Kotak Securities said in a note. Lower interest rates help prices of non-yielding gold.

Gold also gained support from doubts about US-China trade deal. After Chile’s decision to cancel the November 16-17 Asia-Pacific Economic Cooperation summit disrupted plans for the US and China to sign a interim trade deal, US President Donald Trump said the two countries would soon announce a new site to sign a “Phase One” trade agreement.

But Bloomberg reported, citing people familiar with the matter, that Chinese officials Chinese officials doubt that a comprehensive long-term trade deal with US is possible.

Also boosting gold prices are uncertainty about Brexit and recent weak economic data from China. “Brexit uncertainty is also high with deadline extension and fresh elections in December,” Kotak Securities said.

On the other hand, weighing on price is weaker investor interest and consumer demand. New York’s SPDR Gold Trust, the largest gold-backed exchange-traded-fund (ETF), reported a 0.19% fall in gold holding on Wednesday from Tuesday.

Gold consumption in China, the world’s biggest consumer of the precious metal, fell 9.58% year-on-year to 768.31 tonnes in the first nine months of 2019, according to China Gold Association.

Analysts say that gold prices may remain choppy in the near term. However, buying may emerge at lower levels on global growth worries, they add.

“Silver along with gold may witness choppy trade as market players assess central bank monetary policy and US-China trade talks but general bias may be on the upside owing to weaker US dollar,” Kotak Securities said in a report.