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Gold prices fall sharply today, silver rates slump too

By Saima Siddiqui 
Updated Date

New Delhi: Gold prices fell sharply on Thursday in global markets amid the prospect of reduced Federal Reserve stimulus. Spot gold fell 0.7% to $1,774.41 per ounce. In India, futures trading on MCX is closed today for the first half due to a public holiday. Trading will resume at 5 pm later today on MCX.

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Silver also dropped sharply, falling 1.6% to $23.10 per ounce. Platinum dropped 0.8% to $986.49.

Global equity markets were also under pressure today over worries about global growth. Stocks are under pressure after the latest minutes showed most Fed officials agreed they could start slowing the pace of bond purchases later this year.

The dollar index scaled an over nine-month peak, making gold expensive for holders of other currencies.

ETF flows remained weak. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell to their lowest level since mid-April 2020.

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On Wednesday, gold futures on MCX had settled 0.29% lower at ₹47,141 per 10 gram while silver rates slumped 1.26% to ₹62432 per kg.

Analysts say that for any meaningful upside, recapturing of the $1,800 level remains the key, saying that over the next few days, gold’s price action would be determined by the speculation relating to Fed tapering.

Geopolitical tensions are high with Taliban fighters taking control of Afghanistan and market players are worried how other countries may respond to the change in governance, says Kotak Securities. Gold may witness choppy trade as market players assess virus situation, Chinese economic health and geopolitical issues however increasing uncertainty may increase its safe haven appeal and keep prices supported, it added. 

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