Gold prices fall even as rates in international market rise; here’s what dragging down gold prices

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May 28, 2020 11:11 AM

On MCX, gold June futures were trading 0.2 per cent down at Rs 46,426 per 10 gram while silver July futures were ruling at Rs 48,350 per kg, down 0.08 per cent

gold pricesRising tension between the US and China triggered buying in the safe-haven asset and limited its losses. Image: Reuters

Gold prices edged lower on Thursday despite positive trends in the international market as tensions between US-China and weakness in the dollar supported the safe-haven demand. On MCX, gold June futures were trading 0.2 per cent down at Rs 46,426 per 10 gram while silver July futures were ruling at Rs 48,350 per kg, down 0.08 per cent. US President Donald Trump has a long list of possible responses to China’s plans to impose a national security law on Hong Kong, including visa and economic sanctions, said David Stilwell, assistant Secretary of State for East Asia, according to a Reuters report. “Dollar Index is depreciating against major currencies and it is trading around 98.96 levels which is the lowest level in the last 5 weeks. For intraday perspective, we expect the positive trend in gold prices,” said Anuj Gupta, Deputy VP- Commodities & Currencies Research, Angel Broking Ltd.

Rising tension between the US and China triggered buying in the safe-haven asset and limited its losses. “The upside for gold prices will be capped as reopening of businesses and a drop in new coronavirus cases resulted in a substantial improvement in risk sentiment,” Ajay Kedia, MD, Kedia Advisory told Financial Express Online. “Also, stimulus proposals by the Chinese regime and the European Commission will cap the gain,” Kedia added.

Globally, gold prices surged on the back of the tensions between the United States and China over a Hong Kong security law. Spot gold was up 0.2 per cent at $1,711.35 per ounce. US gold futures fell 0.2 per cent to $1,723.60. SPDR holdings rose 0.2% to 1,119.05 tonnes on Wednesday. Palladium rose 0.2 per cent to $1,938.76 per ounce. Among other precious metals, platinum gained 1.9 per cent to $834.19, while silver fell 0.4 per cent to $17.24.

Meanwhile, BSE Sensex reclaimed its 32,000-mark and was trading at 32,066.65, up 461.43 points or 1.46 per cent. While Nifty50 surpassed 9,400 level in today’s trade.

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