Hyderabad: Gold and silver prices corrected sharply in the domestic market for a third consecutive session on Wednesday before recording a small intra-day recovery to trade flat as Russia announced world’s first coronavirus vaccine.
On MCX, Gold’s October gold futures hit a low of Rs 49,955 per 10 gm on Wednesday, but later recovered to trade 0.12% lower at Rs 51,867 in afternoon trade. In the previous session, gold prices had dropped nearly 6%, or Rs 3,200, to Rs 51,929 per 10 gm.
Meanwhile, silver futures on MCX hit an intra-day low of Rs 60,910 per kg on Wednesday before recovering to trade at Rs 65,975.00, down 1.4% from the previous close. On Tuesday, silver prices had crashed almost 12% or Rs 9,000 per kg.
Globally, gold prices corrected by 5.5% on Tuesday and slid to $1,919 per in response to a pick-up in bond yields and the strengthening US dollar. Silver futures had also dropped sharply, and were down 7% to $24.2 an ounce.
On Tuesday, Russia’s president Vladimir Putin said that the country has cleared the world’s first COVID-19 vaccine for use and hopes to begin mass production soon. However, there were concerns regarding efficiency and safety of vaccine among medical professionals as the vaccine has not undergone final Phase-3 trials which usually take months.
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Gold’s safe-haven appeal also took a hit as risk appetite among investors improved on hopes of an economic stimulus package in the US after President Donald Trump tweeted that top congressional Democrats wanted to meet with him on coronavirus-related economic relief.
Prathamesh Mallya, Assistant Vice-President Research (Non-Agro Commodities and Currency) at Angel Broking Ltd, said: “Encouraging PPI (producer price index) numbers released from the US, and hopes of a new Corona relief package boosted the S&P index to record highs. The flavour of the season is returning back to equities with risk appetite of investors increasing, hence, the drastic correction in both gold and silver prices.”
Notably, MCX gold futures had hit a high of Rs 56,191 per 10 gm last week, while silver prices had soared to Rs 77,949 per kg. “Price correction in both the metals have been drastic in the past few trading sessions and these corrections have offered a ray of hope for retail investors as well as physical buyers of the metal,” added Mallya.
He added that support zones for MCX gold futures stand at around Rs 50,800 per 10 gm, followed by Rs 50,200 levels. While for MCX silver futures, support zones stand at around Rs 62,000 per kg.
(ETV Bharat Report)
