Gold prices in the Indian market dipped by almost 3% on Wednesday, as overseas prices dipped by 5%, with gold price having witnessed its worst day in a long time.

News of Russia approving the world’s first COVID-19 vaccine and firm dollar triggered profit-taking in gold and silver. Due to rising US-China tensions as well, investors have been rushing to safety in gold.  The tension between the US and China escalated after the ban of Chinese apps in the US-led to Beijing imposing sanctions on 11 US officials.

Extending decline for the third straight session, Gold futures on Multi Commodity Exchange were trading Rs 1,349 or 2.82% lower at Rs 50,580 per 10 gm against the previous close of Rs 51,929 per 10 gm. Gold futures touched an intraday high of Rs 51,650 per 10 gm, which was Rs 4,540 lower than its all-time high of Rs 56,191, hit last Friday.

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Overseas, gold prices continued to fall today. Spot gold declined as much as 2% to a near three-week low of $1,872.19, while US gold futures slid 2.4% to $1,900. Comex gold fell 2.54% to $ 1,883 per ounce today, after hitting a high of $ 1,923.30.

Due to Covid-19  lockdowns and the consequent economic downturn, gold has been on the rise this year, with an almost 25% price rise.

In Delhi NCR, 24 Karat Gold prices rose to Rs 54,710 per 10 gram. In Chennai, they hit Rs 53,040, and in Mumbai, the rate was Rs 54,390.

Many analysts feel that due to the relative safety of precious commodities during these tough times, Gold prices will keep falling. “Initial pullbacks can be seen but it required to clear $1980 to stabilize the momentum. Else, likely for corrective selling pressure towards $1860 followed by $1780 levels for the day,” a Geojit Financial Services note says.

Anuj Gupta, DVP-Commodities and Currencies Research, Angel Broking said, “Prices are now in the overbought zone. The dollar index is recovered from lower levels due to hawkish Job data released last week. We expect gold may test Rs 52,000 levels to 51,000 levels and Silver may test Rs 69,000 levels to 70,000 levels in the short term towards the downside. Traders may book profit on higher levels and may go for sell in gold and silver, however global economic instability and geopolitical tension between US and China may work as a supportive factor for bullion in the long run. Approval for First COVID-19 vaccine by Russia’s health ministry has also put pressure on the Bullions.”

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