Gold prices in India edged lower in Indian markets today after a sharp fall in the previous session. On MCX, October gold futures were down 0.1% to ₹50771 per 10 gram while silver futures were up 0.05% to ₹68,287 per kg. In the previous session, gold futures had slumped ₹650 per 10 gram to extend losses to the second day while silver prices had crashed ₹2650 per kg. Gold prices in India have corrected sharply from their record highs of ₹56,200 hit last month.
Gold prices were flat today in global markets after a 1.4% drop in the previous session. Spot gold inched up 0.1% to $1,944.58 per ounce, held steady by worries over the global economic recovery. Data released on Wednesday showed US private employers hired fewer workers than expected in August, suggesting that the labor market recovery was slowing.
Among other precious metals, Silver eased 0.1% to $27.48 per ounce, platinum rose 0.1% to $906.69 and palladium fell 0.3% to $2,241.10.
A stronger US dollar put pressure on gold prices. The dollar index, which measures the dollar's performance against a basket of six currencies, rose to 92.852, making gold costlier for holder of other currencies.
"The persistent rally in US and global equity markets amid hopes of economic recovery is also negative for gold. However, supporting price is rising virus cases globally which may force countries to take a cautious approach towards reopening thereby hampering economic activity. Increasing US-China tension is another challenge for global economy which is still struggling to gain momentum.," Kotak Securities said in a note.
"Gold may witness choppy trade as US dollar counters signs of recovery against Fed’s dovish stance. However we expect to see buying interest in gold at lower levels amid persisting risks to global economy and hopes of continuing stimulus measures," the brokerage added.
"Gold may witness choppy trade as US dollar counters signs of recovery against Fed’s dovish stance. However we expect to see buying interest in gold at lower levels amid persisting risks to global economy and hopes of continuing stimulus measures," the brokerage added.
Gold is used as a safe investment during times of political and financial uncertainty.Gold traders will watch the initial U.S. jobless claims report due later in the day, as well as U.S. payroll figures on Friday.
A closely-watched survey showed China's service sector activity grew for a fourth straight month in August, staying above the 50-mark, improving the global risk appetite.
On the other hand, the prospect of additional US stimulus supported gold.