Gold and silver prices slipped on Tuesday in domestic markets as they continued their weak trend of recent weeks. December gold futures fell Rs 450 or 0.9% to Rs 49,051 per 10 gram and silver futures were down 0.9% or Rs 550 to Rs 59,980 per kg on Multi Commodity Exchange (MCX). Gold prices had slumped Rs 750 or 1.5% per 10 gram and silver was low at Rs 1,628 or 2.6% per kg in the previous session.
Gold prices, which had seen a record high of Rs 56,200 in August, have gone down amid a progress on the anti-coronavirus disease vaccines and the recent outflow from gold-backed exchange-traded funds.
Globally, gold slipped as progress on a Covid-19 vaccine and a federal agency’s approval of US President-elect Joe Biden’s transition to the White House bolstered risk appetite, denting the precious metal’s safe-haven appeal. Spot gold fell 0.6% to $1,824.91 per ounce by 0332 GMT. It had fallen as much as 2.2% on Monday to hit a four-month low. US gold futures were down 0.8% at $1,823.90. Silver dropped about 1% to $23.35 an ounce.
“The number of vaccines coming out is giving the market confidence that in six months time, things are going to be better than what they are… the (gold) price is coming off as a result,” said Michael Langford, executive director at corporate advisory and consultancy firm AirGuide, according to Reuters.
Asian equities traded higher after AstraZeneca said on Monday its Covid-19 vaccine could be up to 90% effective. Biden on Monday was formally given the go-ahead by a federal agency to begin his transition to the White House, while US President Donald Trump wrote on Twitter that he was recommending his team to “do what needs to be done with regard to initial protocols”. “The fact that we have a smoother transition between President elect Biden and Trump is just another reason to think that the recovery as it is currently playing out has one less risk to it,” IG Markets analyst Kyle Rodda was quoted as saying by Reuters.
The breakdown of support around $1,840 suggests further downside into the $1,700s before buyers return, Rodda added. Analysts, according to Reuters, noted the likely appointment of former Federal Reserve chair Janet Yellen as US treasury secretary would likely boost the prospect for further fiscal and monetary stimulus and benefit bullion. Gold is seen as a hedge against inflation, likely to result from large stimulus.