Gold Prices Fall For Second Day; Yellow Metal To Trade Sideways To Up

Gold prices in India continue to fall for the second day on June 18. In the futures market, gold on the MCX for August delivery fell 0.11% or Rs. 50 to Rs. 47288 per 10 gm. Silver on the other hand gained 0.22% or Rs. 106 to Rs. 48436 per kg.

Global gold rate

Internationally gold remain steady as rise in coronavirus case raised concern over economic recovery, nonetheless, its appeal remained limited due to strong dollar. Spot gold was flat at $1,726.69 per ounce, as of 0053 GMT. U.S. gold futures were steady at $1,736 per ounce.

In its meeting due 1100 GMT, Bank of England may up its bond buying programme by at least 100 billion pounds ($125 billion).

Also, there has been some recovery in the US economy from the worst of the impact due to Covid 19 but with 25 million US citizens out of job, Jerome Powell addressed lawmakers and said that more of stimulus shall be needed.

Factors influencing correction in gold rate

While the better than expected retail sales US data led to the correction in the yellow metal; downside remained capped due to the India China border tensions as also the geo-political tensions brewing over the Korean peninsula.

Also, a surge in coronavirus cases across the country and the second wave seen in the US and China will lend a higher premium to gold prices.

Outlook For Gold Prices

"We expect gold prices to trade sideways to up with the MCX gold August support at Rs 46,800 (and) resistance at Rs 47,500," said Tapan Patel, a senior analyst (commodities) at HDFC Securities.

Back home, demand for gold is reported to come back from Kerala which is the state-wise biggest consumer of gold in India.

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