Gold Prices Trade Weak As Vaccine Optimism Outweigh Rising Coronavirus Concern

Gold prices in India on Wednesday (November 18, 2020) fell in tandem with international markets. On the MCX, both gold and silver futures for December delivery traded weak. While gold futures were dragged lower to as much as Rs. 50464 and last quoted down by 0.46 percent or Rs. 231 at Rs. 50535, silver too declined sharply by 0.81% or Rs. 512 to Rs. 62736 per kg.

International gold rates

Spot gold prices in the global market dropped by 0.1% to $1,877.39 per ounce by 0344 GMT. Meanwhile, US gold futures traded down by 0.44% at $1876.6 at 1:28 am EST. On Monday, after Moderna claimed that its experimental vaccine against Covid 19 in late-stage trial has shown 94.5% efficacy, gold lost as much as 1.3%.

As per a Reuters data, after as many as 70,000 US citizens were hospitalized for the treatment of Covid 19 as of Monday, many US states began to impose restrictions on gatherings as well as mandated face-coverings. And an increased number of coronavirus positive cases across the US will slow down the economy and shall prohibit consumers to spend. "We're seeing states begin to impose some activity restrictions," US Fed Federal Reserve Chairman Powell said while having an online discussion with the Bay Area Council.

Also, at the same time, US reported weak retail sales number with growth just at a mere 0.3 percent for the month of October. In September, retail sales rose by 1.6 percent.

Outlook for gold

Currently while there is no catalyst that could spur a rally in the precious metal gold, a subdued dollar, intensifying pandemic situation as well as expectations around fresh US stimulus will keep in check any major downside, said Hareesh V., head of commodity research at Geojit Financial Services.

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