Gold & Silver

Gold, silver return to month-ago levels as Covid variant Omicron fears recede

Rutam V Vora | | Updated on: Nov 30, 2021
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Festive buying, Fed taper plans, Omicron cause volatility in nervous-November

Gold futures extended gains as it rose by ₹177 soon after opening nearly flat on Tuesday.

MCX gold December futures were last quoted at ₹47710 per 10 grams after hitting a high of ₹47,764 in the opening trades.

Silver, too, tracked gains in the yellow metal. MCX Silver December futures gained ₹237 to trade at ₹61,877 a kg after flat opening on Tuesday.

The advancement in India gold futures amidst softening in the international prices. Concerns over Omicron variant and its intensity were subsided after the South African health authorities claimed the new variant had mild health effects. This supported global equities markets as panic selling was contained on Monday.

Fast Four Bullion:

1. Nervous November for bullion!

November month was an eventful month for precious metals in India. The month that started-off with festive purchases, which pushed up the prices, saw demand slowing down by mid-month as prices scaled up. US Federal Reserve's plans of monetary tightening started pulling the yellow metal down. But by the third week, the emergence of a new and aggressive variant of coronavirus Omnicron caused worldwide panic. Countries started imposing travel restrictions and enhanced tracing and testing, giving the sense of returning the lockdown nightmares. Gold's safe-haven demand revived as it hit fresh monthly highs. The panic sentiment, however, started receding after an indication of a mild severity of the new variant. And the bullion started softening by the end of November. As quoted by India Bullion and Jewellers Association (IBJA), India spot gold started the month from ₹47,754 on November 1 and inched up to make a peak of ₹49,553 on November 16 before returning to Rs 48,124 on November 29.

2. International Gold softens

CME Gold December Futures hovered in the range of $1782.7 to USD 1790.2 an oz (oz is equal to approx 28.3 grams). This was off from the previous day's intra-day high of $1798.9. After a volatile past fortnight, international gold is back to its month-ago levels of $ 1772.4 to $ 1802.9. Analysts expect the renewed haven demand for bullion will the downtrend contained, while monetary tightening measures by major economies prevent gold from making fresh highs. CME silver December Futures was last quoted at $22.875 an oz, indicating a sustained slide since November 16 from the intra-day levels of $25.49.

3. Gold, silver take a pause on MCX Futures

MCX gold December Futures opened nearly flat but immediately gained ₹163 or 0.34 per cent to trade in the positive territory. However, the Open interests showed a sharp reduction over previous sessions, indicating that the investors are not holding the positions in anticipation of a slide in the prices. MCX gold was last quoted at ₹47750 on Tuesday.

Silver Futures tracked gold advances. MCX Silver December Futures was last quoted at ₹61,915, up 0.45% or ₹275 from the previous close. The prices, however, are on a sustained slide from ₹66,625 quoted on November 17.

4. Outlook

Analysts expect bullion to remain volatile amidst uncertainty over the effect of the new variant - Omicron. Also, traders are concerned whether the variant will harm the US economy enough to derail Fed members' plans to accelerate the tapering of monetary stimulus. Analysts prefer to wait for a decisive direction on the market after clarifying whether the current vaccines are effective against the new variant. The gold range is expected between ₹47,270 and ₹48,770, while silver is expected to hover in a narrow range of around ₹61,300 to 62,700.

Published on November 30, 2021

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