Gold prices fall Rs 250 ahead of US election outcome; yellow metal off over 8.5% from record high

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November 4, 2020 10:24 AM

Gold may witness choppy trade as the market reacts to the outcome of the US election however hopes of additional stimulus measures may keep price supported

gold price, gold rate, US electionGold prices fell in India today ahead of the US presidential elections result and a volatile currency market. Image: Reuters

Gold prices fell in India today ahead of the US presidential elections result and a volatile currency market. Besides, market participants are keeping close tabs on the Federal Open Market Committee (FOMC) which began its two-day meeting on Wednesday. On MCX, gold December futures were trading half a per cent or Rs 250 down at Rs 51,349 per 10 gram, while the silver December futures were ruling at Rs 61,684 per kg, down Rs 1,000 or 1.60 per cent. In the previous session, gold and silver futures ended in the positive territory with over one per cent gain. “The uncertainty that President Trump may win a second term is paving the way for safe-haven US dollar to flourish which is generally bad for gold prices,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online. 

In the first week of August, gold hit a record high of Rs 56,191 per 10 gram while silver scaled to a fresh all-time high of Rs 77,949 per kg. Patel expects gold prices to go up after election noise is over. For short term i.e. for a week, Patel expects high volatility in gold and trading in the range of $1920-$1870. On MCX, the range is expected to be between Rs 50500-51800 per 10 gram. On MCX, Rs 50,000 is proving to be a strong base and any long positions could be maintained with Rs 50000 stop loss. “On the upside, Rs 52000 continues to be strong resistance and we may see gold prices flourishing if it manages to break above $1930 in COMEX,” Bhavik Patel said.

Intraday support for gold in MCX is 51050 while resistance is expected to be 51500. Patel advocates to buy on dips around Rs 51200. Globally, spot gold was down 0.4 per cent at $1,901.72 per ounce. US gold futures were 0.4 per cent down at $1,902.20. Amid other factors, gold is supported by expectations of additional stimulus measures and rising virus cases. ETF flows however show weaker investor interest. “Gold may witness choppy trade as the market reacts to the outcome of the US election however hopes of additional stimulus measures may keep price supported,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities. 

Among other metals, silver fell 0.2 per cent to $24.11 per ounce. Platinum dropped half a per cent to $861.90 and palladium fell 1.1 per cent to $2,256.88. Hareesh V, Head of Commodity Research, said hopes of more fiscal stimulus measures, escalating US-China trade tensions and rising new pandemic cases continue to offer lower-level support to the yellow metal. 

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