Gold & Silver

Gold futures open positive as global market reverses loses

Rutam Vora Ahmedabad | Updated on November 25, 2021

Spot gold prices erase Festive gains made since November 5

Gold futures gained by ₹111 to open at ₹47,549 per 10 grams against previous close of ₹47,438 for MCX December contract.

MCX silver December futures also opened with gains of ₹305 at ₹62,940 per kg from ₹62,635 for MCX December contract.

After closing in a positive territory on Wednesday, bullion futures extended gains tracking global sentiment. However, in spot markets, gold remained weak and slid further erasing the festive gains of past fortnight.

Fast Four Bullion

1. Is Gold stabilising?

Gold and silver futures reversed the losing trend as it maintained positive territory at the opening on Thursday after ending firm on Wednesday.

After witnessing a fall of 4 per cent since November 12 from ₹49,314 to hit the lows of ₹47434, gold Futures turned positive. India gold tracked international gold, which started stabilising at around $1786-1792 an ounce (oz is equal to approx 28.3 grams).

Waning festive demand for gold and investors' preference for alternative asset classes amidst US Federal Reserve's indication for an early tapering of stimulus to curb inflationary risks had triggered a slide in the yellow metal. But the downside was contained by the rising COVID-19 cases, lockdown measures in parts of Europe and broader economic uncertainties in China. Gold's safe haven demand kept downside limited.

2. International Gold edges up:

CME gold december futures last quoted at $1792 an oz on November 24, higher from the prior settle rate of $1784.3. Gold prices edged up as dollar slightly eased. But the Federal Reserve's policy indicating an accelerated stimulus tapering weighed on the metal to keep it below $1800.

The pressure persisted on silver, but contained the downside as CME Silver December Futures last quoted at $23.625 an oz, marginally up 0.55 per cent against the previous settle rate of $23.496 an oz.

3. Spot gold on a sustained slide

Spot gold continued a slide. The India Bullion and Jewellers Association (IBJA) quoted the gold (999 purity) prices at ₹47,584 per 10 grams on November 24, which was lower than the previous day's rates of ₹47,826. In spot markets, gold has erased all the Festive gains it had made since November 5, gaining from ₹47,702 to hit a high of ₹49,553 on November 16. At the current levels, the spot prices are off the peak levels by 3.9 per cent.

Spot silver slipped below ₹63,000 and was last quoted at ₹62,941 on Wednesday, lower by about 4.1 per cent from ₹65,653 seen a month ago.

4. Outlook

Amidst the current weakness in the bullion, Gold investors seem to be concerned over the US Fed's decision on early tapering of stimulus coupled with the weakening of consumer demand for the yellow metal on the precious metals to maintain a strong upside.

Failing to gain an upward strength from the current levels, analysts see gold sliding to ₹47,034 levels, while silver may inch closer to ₹62,000 levels.

Published on November 25, 2021

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