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Gold Prices Fall Compared to Silver, Rs 1500 in Two Days

Over the last two sessions, today saw gold prices edging lower in India after its previous strong gains. August gold futures fell 0.1% to Rs52,540 per 10 gram on MCX. By comparison, silver futures on MCX boosted 0.18% to Rs65,123 per kg.
Gold had also surged over 1% or Rs550 in the previous session, extending Monday’s gain of Rs 1000, while silver prices saw Rs 67,560 at day’s high, although gain-taking at higher levels weighed it lower and the white metal and settled 0.4% lower.
In the international market scenario, spot gold was little changed at $1,957.84 per ounce. Prices of gold hit an all-time of $1,980.57 in the previous session before retreating after investors booked profits and the dollar regained some ground. Among other precious metals, silver dropped 1.1% to $24.31 per ounce while palladium slipped 1.1% to $2,259.52. Gold traders are now focusing ahead to the US Fed’s two-day policy meeting, which concludes later today.
Concerns about the impact of increasing coronavirus cases on the global economy and expectations of potential inflation from more stimulus measures supported gold.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.
Tuesday data indicated that US Consumer confidence fell more than expected in July.
Kotak Securities said in a note, “Gains in US Dollar may, however, be capped amid political wrangling over the next US fiscal rescue package. However, in the case of gold safe-haven demand may continue to lend support.” This followed with the US dollar having rebounded after hitting a two-year low on Tuesday against a basket of currencies.
Investment demand of gold remained strong. The holdings SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund or gold ETF, said its holdings rose 0.7% to 1,243.12 tonnes.
Meanwhile, US lawmakers were far from reaching an agreement on a new package to support the world’s leading economy. With only 100 days to go before the US presidential election, talks are tense between Democrats and Republicans in the US Congress.

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