Gold and silver prices in India on August 12, 2020 extended their previous day's exorbitant losses. October gold futures on the MCX traded down by 2.46% or Rs. 1277 at Rs. 50652 per 10 gm. In line, silver futures also tumbled by a huge 6.7% or Rs. 4484 to Rs. 62450 per kg. In the previous week, gold prices in India scaled to more than Rs. 56000 while silver neared Rs. 78000.
International gold rates
In global markets, gold prices continue to drift lower today. Spot gold shed 2.1% to $1,872.61 per ounce while US futures traded below $1900 as the US dollar hold on to gains, prompting investors to evaluate their holdings. Silver futures also fell sharply, and were down 7% at $24.2 an ounce.
The sudden free fall in gold price comes close on the heels of gains in US bond yields and the resurgence in the US dollar. The dollar index in today's session remained steady against a basket of top currencies.
The other factor weighing on gold prices is Russia's announcement of a vaccine for Covid 19 which improved risk sentiment. Analysts suggest that the trigger for the plunge was the news concerning Russia's Covid-19 vaccine which resulted in some profit-taking.
"Gold rallied sharply in last few days without any major correction and this pushed it deep into overbought territory. With US dollar index attempting some recovery, we may see some correction in gold," Kotak Securities said in a note.