After a good run, gold and silver have witnessed a steep drop in prices. There are many factors attributed to it which include Russia’s claim of COVID-19 vaccine to traders booking profit among others.
Analysts believe that this drop is triggered by a series of speculation that is governing the market. Some of the factors that lead to drop in gold prices are easing of the US-China tension; hopes around the stimulus package of the United States; talks on cutting capital gain tax in the United States, Russia’s COVID-19 vaccine claims; among other things.
Analyst said, “Today bullion is very volatile. The drop is more due to speculation. While it went below USD 1,800 and now recovering above USD 1,900 per ounce.” However, it is down from the peak of USD 2, 072 per ounce.
Gold collapsed not just in the global market but Indian as well. On Friday, as per IBJA rates (excluding taxes) gold was Rs 56,000 plus per 10 gms and silver Rs 76,000 plus per kg. Today it is Rs 52,000 plus for gold and silver Rs 63, 000 plus per kg.
Analysts, however, are of the view that the sentiments in the bullion market are still bullish and the yellow metal would soon be back on the upward trend.
Gold futures slumped for the second straight day on Wednesday. Currently, the October contract of gold on the Multi-Commodity Exchange (MCX) is trading at Rs 51,672 per 10 gram, lower by Rs 257 or 0.49 per cent from its previous close.
It has, however, recovered from the day's low of Rs 49,955 per 10 gram.
The slump was in line with the international spot prices where gold prices fell as US bond yields advanced and the dollar recovered.
(inputs from agency)