Gold prices fall nearly Rs1,000 in a day, silver rates slump Rs2,000

08 Aug , 2021 By : Kanchan Joshi

Gold and silver rates fell sharply in India have fallen sharply in tandem with a sharp selloff in global prices. On MCX, gold futures fell Rs960 or 2% on Friday to over one month low of Rs46,651 per 10 gram while silver slumped 3% or Rs2,000 to Rs64,975 per kg. In global markets, gold prices dipped over 2% to $1,765.30 an ounce as dollar strengthened and Treasury yields rose after a better-than-expected increase in US payrolls fueled expectations that the Federal Reserve is moving closer to a pullback of stimulus.

As prices eased in India, dealers charged a premium over official gold prices for the first time in a month as rates eased. According to a Reuters report, premium of up to $1 an ounce over official domestic prices were charged this week as compared to last week's $4 discounts. Gold rates in India include 10.75% import and 3% GST.

The US jobs data showed continued momentum in the U.S.’s economic recovery. Speculation about the Federal Reserve cutting back on its stimulus programme has been brewing in recent days. Data released on Friday showed US job growth accelerated in July by the most in almost a year and the unemployment rate declined. The yield on the 10-year U.S. Treasury climbed above 1.3% while the dollar index rose 0.6% to 92.780. Higher interest rates increase the opportunity cost of holding gold.

Among other precious metals, silver slipped 3.5% to $24.25 an ounce, while platinum dropped 2.6% to $978.77.

Analysts however say that with still tremendous amount of support getting pumped into the global economy, gold's downside could be limited.

Nish Bhatt, Founder & CEO, Millwood Kane International - an Investment consulting firm, said the latest variant of the virus, the pace of vaccination, unlocking, and signs of policy tightening by the Fed will guide gold prices going forward.

In India, the latest tranche of Sovereign Gold Bond (SGB) Scheme 2021-22 will open for subscription on Monday. The RBI has fixed an issue price of Rs4,790 per gram and those applying online and making payment online get a discoun of Rs50 per gram.

Earlier, the government had announced it will issue the Sovereign Gold Bond (SGB) in six tranches from May 2021 to September 2021. The RBI will issue the bonds on behalf of the Government of India.