Gold prices drop for second week in a row, down ₹6000 from record highs
Gold prices in India fell for the second week in a row as optimism about covid vaccine and uncertainty over the US stimulus package dented global rates. On Friday, gold futures on MCX ended 0.5% higher to ₹50,260 per 10 gram while silver settled 1.2% higher at ₹62,260 per kg. However, for the week, gold prices ended about ₹700 per 10 gram lower in Indian markets while silver fell ₹1,500 per kg.
The price correction helped boost buying in India’s retail gold market this week, Reuters reported, though premiums eased slightly from a week ago. Dealers charged premiums of about $2 an ounce over official domestic prices, down from $4 last week. Gold prices in India include 12.5% import and 3% GST.
In August, gold had hit a record high of ₹56,200 per 10 gram. Jewellery maker Titan Company this week reported growth in businesses during the festive season. “The jewellery business witnessed a mid-teens growth (around 15 per cent) for the 30 day festive season starting from Dussehra till Diwali over the corresponding period last year, with a decent recovery in studded jewellery sales,” the company said in a business update.
In global markets, gold edged higher on Friday after US Treasury Secretary Steven Mnuchin signalled that negotiations on stimulus measures will continue, boosting the metal’s appeal as a hedge against likely inflation. Spot gold rose to $1,871.99 per ounce but on a weekly basis edged 0.8% lower.
However, global gold rates have dipped about 5% since positive reports on COVID-19 vaccines from Pfizer and Moderna in the past 12 days. Gold has mainly benefited this year on the back of damage to economies from the pandemic and the resultant global stimulus. Gold is viewed by many as a safe haven asset, inevitably driven higher in times of turmoil.