Gold prices in India in trade on August 20, 2020 continued with their downward journey even as there was seen some respite in prices internationally after sharp sell-off in the previous day's session on the US Fed's concern over recovery from the economic slump caused by the pandemic.
On the MCX, October gold futures were down by 1.09% or Rs. 573 at Rs. 52049 per 10 gm at 12:17 pm, extending their previous day's fall of 1.77% or Rs. 949 to Rs. 52622 per 10gm. Silver in line also traded lower by 1.03% or Rs. 700 at Rs. 67263 per kg.
"Gold prices continue to see profit booking. The US Federal Reserve's meeting minutes failed to provide support to US bond yields. However, bleak global economic outlook and escalating US-China trade tensions may support yellow metal," said Jigar Trivedi, Fundamental Research Analyst at Anand Rathi.
International gold rates
In the global markets, the precious yellow metal regained its poise on dovish Fed today. Spot gold surged as much as 0.82% to $1945.43 per ounce, after inching lower by a huge 3.6% to a near 1-week low in the previous session. This is as the cautious outlook once again brightened the prospect of gold as a 'safe haven' asset class.
The US policymakers amid the coronavirus pandemic are mulling to overhaul its monetary policy, as a result the US Federal Bank would continue with its aggressive measures for far longer than specified earlier, minutes from the last US Fed meet showed.
However gold's further gains were limited due to rise in the dollar index by as much as 0.2%, extending previous day's sharp gains against a basket of rival currencies.
On the US-China spat front, the US State informed HongKong Wednesday that it has cancelled three bilateral agreement with the semi-autonomous city after China imposed a far-reaching national security law.
Also, US treasury yields surged as the Fed did not seem to implement yield curve control measures. Higher yields render keeping bullion a not so good proposition as the opportunity cost of holding non-yielding asset such as gold increases.