Gold on the backfoot as risk appetite increases

Even though the Coronavirus cases jumped to over 4,500 (while spreading to Europe and Japan) and the death toll rose over 100, gold took a beating on Tuesday (January 28). It opened in London at $1,579.60 per ounce (am fix) and closed even lower at $1,574 per ounce (London pm fix). It would seem that profit-booking by investors and professional traders who sold off at highs to buy at dips took over. Then, the Dow Jones rebounded by around 0.66% to 28,772.85 and positive consumer durables data saw gold hammered lower in New York.

The yellow metal ended in New York around the $1,566-67 per ounce region. However, the trading range was much higher between $1,565 and $1,578 per ounce. In early morning Asian trading on the 29th, gold was around the $1,569 per ounce levels, even as the trading range was $1,565 to $1,582 per ounce. There is still a lot to come here in days to come. Gold faces a tumultuous time ahead.

In the domestic market, though the BSE Sensex declined by 189 points to 40,966, the yellow metal fell mainly on global cues. However, the decline in the gold price was cushioned by the firmer rupee against the US dollar. Gold opened in Mumbai at Rs.40,634 per 10 gms, down by Rs.58 from previous day’s closing price. It closed slightly higher but, with a net loss of Rs.36 at Rs.40,656 per 10 gms (Mumbai IBJA rates).

Silver too followed international trends as yet opened sharply lower in Mumbai at Rs 46,685 per kg, a loss of Rs.710 and then closed a shade higher at Rs 46,695 per kg. Both the precious could open much lower in the morning in Mumbai.

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