Prices of Gold and silver have been going down the entire week registering their biggest fall in many months. On a weekly basis, gold prices fell ₹2,000 per 10 gram in India while silver tumbled ₹9,000 per kg.
According to domestic brokerage Geojit Financial Services, Slippage below ₹49,250 could squeeze down prices lower to 48900-48800 region firstly or even lower. In the global market, gold and silver prices had their biggest weekly losses since March. Gold fell 4.6% this week, while silver slumped 15%. Analysts say the fall to a resurgent US dollar as concern over the outlook for global economic growth bolstered the appeal of the world’s most liquid currency as a safe-haven.
Gold, which is also seen as a hedge against inflation, was also pressured by abating concerns about inflation as dimming view of the recovery undercuts the outlook for a rise in consumer prices.
“Prices have been falling sharply in the last few sessions as the dollar held on to its recent rally while a lack of additional stimulus to aid the recovery of the Coronavirus-battered global economy further weighed on sentiments,” said a report by ICICI Securities.
Hemant Kanawala, Head of Equity, Kotak Mahindra Life Insurance said, the risk-off sentiment has led to a rally in US Dollar to a two month high and concomitantly falls in gold prices, says
Some analysts however say that gold’s slump may be temporary with increased uncertainty over the US presidential election. Gold may also find support at lower levels as geopolitical tensions remain while the economic outlook also remains dim.