Bullion prices are likely to continue the weak trend in the rest of the week as positive US manufacturing data increased optimism in the market regarding global economic recovery and curbed demand for the safe-haven metal.
In the domestic market, October gold opened on Multi Commodity Exchange (MCX) at Rs 51,449 per 10 gm, lower than Tuesday’s closing of Rs 51,502. MCX December silver opened on a negative note at Rs 70,600 per kg, lower than yesterday’s closing of Rs 70,890 per kg.
Anuj Gupta, deputy vice-president (commodities and currencies research), Angel Broking said “Yesterday gold prices fell by 0.38% and closed at 51,502 levels, and silver prices have increased by 0.64% and closed at 70,890 levels. In the international market gold is trading at $1963 per troy ounce and silver is trading at $28.06 levels.
The US dollar hovered near more than a two-year low which made gold cheaper for other currency holders. Weaker US dollar, lower interest rate, expectation of a vast stimulus infusion and growing rift between US and China ahead of the US elections continued to attract investors towards gold on Tuesday.”
But on Wednesday, the US dollar recovered as US factory activities strengthened in August which might weigh on gold prices,” added Gupta. Navneet Damani, vice-president (commodities research) at Motilal Oswal Financial Services added that along with the US, manufacturing PMI (purchasing managers’ index) data of other major economies were also reported better than expectations hence keeping pressure on the metal.