Gold Prices Edge Lower After Sharp Surge Yesterday

Gold prices in early trade on Wednesday (July 8, 2020) inched lower after a sharp surge in yesterday's trade. On the MCX, gold August futures were trading down by 0.14% or Rs. 68 at Rs. 48732 per 10 gm.

Today, 22K and 24K gold is retailing at Rs. 46630 and Rs. 47630 per 10 gm, respectively.

Gold Prices Edge Lower After Sharp Surge Yesterday

In the previous day after remaining almost flat, gold prices jumped as much as 1.19% or Rs. 575 to Rs. 48800 per 10gm and made a high of Rs. 48825. This was on the back of rising coronavirus cases across the world and also as rupee slipped again during the session to close weaker at 74.936 per US dollar.

Gains In Gold Price Remain Capped Due To Dollar Rebound And Better US PMI Numbers

Nonetheless, further gains in the precious metal remained capped on account of a rebound in the US dollar index which traded at 2-week low in comparison to the earlier one-month low. Also, US PMI numbers have come in better than expected for the month of June, almost to pre-Covid 19 levels.

Gold prices inched higher, hovering near an eight-year high, as concerns over surging coronavirus cases around the world kept bullion's safety demand elevated, Navneet Damani, Vice President, Motilal Oswal, said.

On July 6, the country's covid 19 cases tally surpassed Russia to become the nation with the third-highest number of coronavirus infections globally. While in the US coronavirus toll has crossed 1,30,000 mark.

What further weighed on the gold price is the easing tensions between India and China.

Outlook For Gold Prices

The broader trend on COMEX could be in the range of $1,755-1,795/oz, Damani said. "On the domestic front, prices could hover in the range of Rs 48,030-48,550 per 10 gram."

Ravindra Rao, VP- Head Commodity Research at Kotak Securities, said gold is witnessing mixed trade, amid lack of direction in the market. He warned that weighing on prices is persisting strength in equity markets due to signs of an economic recovery and expectations of additional stimulus measures.

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