Wobbly Wednesday: Gold and silver down by BIG margin

Source :Sify
Author :Finance Desk
Last Updated: Wed, Sep 23rd, 2020, 12:08:02hrs
A bar of 100 grams Fine Gold from Logam Mulia. Photo attributed to AFP for Adek Berry.

Mumbai: Trends on Gold rates are turning out to be as spicy as an IPL weekend-match. The yellow metal is down from peaks of Rs 56,000 per ten grams (August). This could be a correction for those keen on investing or buying a few grams of Gold ahead of the festive season.  

Tuesday Tumble  saw gold price crashed by a margin of 2-3 percent across Indian cities. On Wednesday, gold and silver prices traded down by a margin of 0.5 - 1 percent across markets. This translates into a revision of minus Rs 250 - 350 across several cities.  

Ditto for Silver. Silver price saw a correction in range of 2-3 percent, down Rs 2,000 per kilo. The average rate across India stood at Rs 6,163 per kilo.  

The LBMA rate, effective for Wednesday, was $1,906 per ounce (31.1035 grams). A week ago (16th Sept), it was $1,961.80 per ounce. The trading range on the US-Comex was $1,885 - 1,905, well below the LBMA-rate implying further contraction.  

On the MCX, Gold for October futures opened at Rs 49,831, down by 1 percent which translates into a revision of Rs 505. Silver futures for December on MCX crashed by 3.8 percent to Rs 58,910 per kilo.  

The reason for correction in Bullion is attributed to the Dollar exchange which has steadily gained in the last two trading sessions. Also, a drop in Covid cases and casualties seems to have assuaged the average investor of normalcy.  

The US GDP data, to be released on Sept 30, may provide fresh cues on how deep in bullion markets could be. Positive GDP numbers may boost the US Dollar.  

As regards the India-demand, September has usually turned out to be dull (Pitrupaksha season) and any uptick is observed a few weeks later (Dussehra is on Oct 25, Dhanteras is on Nov 13).  

Will Gold and Silver price show further correction? In the last three trading sessions, Gold has crashed by a margin of 5-6 percent. Will this be Gold's worst weekly crash? Follow Sify Gold for latest information. 

Disclaimer: Image, attributed to Adek Berry for AFP, is used for representational purposes. Sify is subscribed to AFP.