KOLKATA: Bullion traded weak on Wednesday as hopes for a vaccine against Covid-19 and easing US-China trade tensions weighed on prices. Gold futures at Multi Commodity Exchange (MCX) for October pared morning gains and was at Rs 50,984 per 10 gram in early afternoon trade. It opened at Rs 51,165 and touched a high of Rs 51,184.
Silver futures for September fell by more than 1 per cent to Rs 63,300 per kg in morning trade. It opened at Rs 64,398 and was trading at Rs 63,710 at 12.30 pm gaining a bit from the downside in the early trade.
Analysts said the sentiment for both gold and silver was negative on Wednesday. Tapan Patel, senior analyst (commodities) at HDFC Securities said “Gold prices have kept downside limited in early trade due to rupee depreciation against the dollar. Gold and silver prices are expected to trade sideways to down for the day over dollar recovery and positive investment sentiments from the US-China front.”
Anuj Gupta, deputy vice president (commodities and currencies research) at Angel Broking, said: “Global equity market is trading higher as investors cheered signs of progress in US-China trade negotiations and following a fresh Wall Street rally and also positive cues in front of the vaccine of Covid-19.”
Downside remained limited as the outlook for a global economic recovery from Covid-19 turned gloomier. Data released showed a dive in US consumer confidence, with the Conference Board (CB) consumer confidence index falling to 84.8, said Sriram Iyer, senior research analyst at Reliance Securities.
Navneet Damani, vice-president, commodities research, Motilal Oswal Financial Services said that on data front, US consumer confidence unexpectedly fell in August to hit a six-year low. On the other hand, new home sales significantly increased.
“Investors today will focus on the US core durable goods orders data and weaker-than-expected economic data could keep the dollar weighed down and support precious metals at lower levels. Market participants now also await a speech by US Federal Reserve Chairman Jerome Powell on Thursday where he is expected to address the US central bank’s view on inflation and monetary policy. As we witness a fall in prices, an outflow in Exchange Traded Fund (ETF)is also seen as SPDR holdings fell 0.3 per cent to 1,248.87 tonnes on Tuesday from 1,252.38 tonnes on Monday. Broader trend on COMEX could be in the range of $1890- 1945 and on domestic front prices could hover in the range of Rs 50,800-51,450 per 10 gm,” Damani said.