MCX gold having rallied sharply in yesterday’s session on the back of a weak dollar, today has witnessed a correction

Gold prices fell over half a per cent in Wednesday’s trade amid profit booking even as India-China border tensions flared up. Beside, coronavirus cases in India continue to witness a spike as in the last 24 hours 2,003 deaths have been reported. The total number of cases in India reached above 3.54 lakh with the death toll at 11,903. A violent face-off between India-China in Galwan valley of Ladakh, Indian Army confirmed the death of 20 personnel on the Indian side. On MCX, gold August futures were trading Rs 242 or 0.51 per cent lower at Rs 47,325 per 10 grams, while the silver July futures were ruling with a loss of Rs 460 or 0.95 per cent at Rs 47,870 per kg.

A host of factors may lead to a fall in gold price today. “MCX gold having rallied sharply in yesterday’s session on the back of a weak dollar, today has witnessed a correction. The US yesterday posted staller retail sales numbers underscoring recessionary fears. A vaccine in the UK is showing signs of recovery among Covid-19 patients. Hence, overall the yellow metal may continue to fall further in intraday today,” said Jigar Trivedi, Fundamental Research Analyst at Anand Rathi Shares and Stock Brokers.

While another analyst believes that buying in gold will continue. “Buying momentum is likely to continue as long as prices stay above $1710. However, strong resistances are seen at $1740 followed by $1780 levels. The immediate downside reversal point is $1645,” said Hareesh V, Head Commodity Research at Geojit Financial Services.

Globally, gold prices held steady on Wednesday, as fears of a second wave of coronavirus infections offset optimism around a potential COVID-19 drug and a stronger U.S. dollar. Spot gold was flat at $1,727.22 per ounce. US gold futures were steady at $1,737 per ounce. Palladium fell 0.5 per cent to $1,922.13 per ounce, while silver gained 0.4 per cent to $17.46, and platinum was mostly unchanged at $820.04, according to Reuters.

On the domestic equity front, indices were trading highly volatile. BSE Sensex slipped 140 points or 0.41 per cent to trade at 33,466, while the broader Nifty 50 index slipped below 9,900 level, to rule at 9,868.