Gold prices off 10% from record high; prices may inch near Rs 52,000 per 10 gm by Nov-end

Gold prices in India fell for the second day on Tuesday as the dollar index has rebounded after two back to back sessions of sharp depreciation, according to analysts. On MCX, gold December futures were trading Rs 117 or 0.23 per cent down at Rs 50,570 per 10 gram. While silver December futures were ruling at Rs 62,000 per kg, down Rs 95 or 0.15 per cent on the multi-commodity exchange. COMEX gold was also trading modestly lower today near $1902/oz after a 0.3 per cent gain in the previous session. Even as ETF inflows showed investors buying interest in gold, the pace was marginal. “Investors have turned the focus on stimulus developments in the US which might get passed before the election. The safe-haven demand has been steady amid the upcoming US presidential election, uncertainties over Brexit trade talks and rising COVID-19 cases, ” Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers, told Financial Express Online, recommending to stay invested in the bullion commodities.

In the first week of August, gold hit a record high of Rs 56,191 per 10 gram while silver scaled to a fresh all-time high of Rs 77,949 per kg. Since then, gold and silver have been trading volatile. From the record highs, gold has lost over 10 per cent, while silver prices have climbed down over 20 per cent.

On Monday, international bullion prices rebounded as the U.S. Dollar retreated amid expectations of a US stimulus deal ahead of the November 3, 2020, presidential elections. “We could see prices changing quickly from current levels and volatility increasing as US political and election headlines come near. As the US Presidential election heats up, there will be more demand for gold or US dollar as global safe havens,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online. 

Patel added saying that the long term fundamentals are positive for gold but some noise in gold prices can be witnessed if the election result is not matched with market expectation. Investors may rush for safe-haven in the US Dollar leading to some pullback in gold prices.  

Globally, spot gold fell 0.1 per cent to $1,903.16 per ounce. US gold futures were down 0.3 per cent at $1,906.50. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.02 per cent to 1,272.85 tonnes on Monday from 1,272.56 tonnes on Friday. Among other metals, silver prices fell 0.3 per cent to $24.43 per ounce, platinum and palladium were 0.1 per cent higher at $856.85 and $2,345.37, respectively.

Gold prices may trade near Rs 52,000 by Nov-end

Patel expects that gold prices will become steady by Nov-end as political noise would be over by then and gold will trade around Rs 52,000 by Nov-end. “For short term traders, we would recommend to remain vigilant as volatility will start increasing from 20th Oct while medium term and long term investors can wait for any dip around Rs 49000-48000 to accumulate gold,” Patel advised.

Gold support seen at 50400-50200

Sriram Iyer, Senior Research Analyst at Reliance Securities said that MCX gold December did not manage to close above 65-Daily Moving Average around 50750, indicating a sideways momentum where 50700-50900 will hold resistance and support is at 50400-50200 levels