Gold & Silver

Gold, silver continue to weaken as investors turn to riskier assets

Rutam Vora Ahmedabad | Updated on November 26, 2019 Published on November 26, 2019

MCX Gold for December opened weak on Tuesday at Rs 37,661 per 10 grams. Representative image   -  Reuters

Spot gold, silver move towards monthly lows amid continued weakness

Improving sentiment around US-China trade relations, coupled with positive US economy data and poor physical demand in Indian markets, is turning investors towards riskier assets and away from the safe haven instrument. The change in investor perception is likely to further weaken prices of the yellow metal, which is nearing its monthly low levels.

International spot gold ended lower, on Monday, by 0.49 per cent at USD 1,454.9 per ounce. On Tuesday in opening trade, Comex gold for December quoted at USD 1,455 down by USD 1.9 an oz from previous close.

Tracking the international price trend, India spot gold may slip below Rs 38,000 per 10 grams on Tuesday after closing at Rs 38,023  (for 999 purity spot as quoted by IBJA) on Monday. MCX Gold for December opened weak on Tuesday at Rs 37,661 per 10 grams, down Rs 62 from previous close.

However, the downfall may be limited due to uncertainty on the phase - 2 deal between US and China.

Silver continued negative trend with demand taking a hit. Spot silver on Monday ended at Rs 44,250 per kg (IBJA spot rate).

Dinesh Thakkar, CMD, Tradebulls stated that silver prices are in a 2.5-month-old downtrend on the daily bar chart. "Silver prices opened on November 26, with 127 points lower and continues to remain under pressure. It has broken psychological support of $17 and next support comes at $16.70. In MCX, Silver is expected to test lower range of 43,900 and 43,600. Only above 45,000 do we see silver bulls gaining upper hand," Thakkar told BusinessLine.

"December silver futures bears have the overall near-term technical advantage. Yesterday silver traded in negative zone after risk appetite increased on the surprising news that China says it will step up its efforts to protect intellectual property rights," he added.

On the overall economic factors influencing the bullion prices, Abhishek Bansal, Chairman of ABans Group of Companies commented, "Gold prices are trading weak after the US and China expressed willingness to sign a 'phase-one' trade deal by the year-end. Recent economic data has shown signs of stability in the US economy and is indicating a bottom formation of the slowdown in the coming quarters in the world economy."

Published on November 26, 2019
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