October gold futures at the Multi Commodity Exchange opening lower at Rs 52,550 per 10 gm compared to yesterday’s closing of Rs 52,622 per 10 gm. Silver also followed the gold and MCX September silver opened at Rs 67,570 per kg, lower by Rs 393 per kg in comparison to yesterday’s closing price. At around 12.30 pm, both the precious metals fell further. Gold was trading at Rs 52,138 per 10 gm while silver was trading at Rs 67,388 per kg.
Bankers and analysts feel that there will be correction in prices in the short term even though the broad outlook for gold continues to be bullish. Shekhar Bhandari, president, global transaction banking at Kotak Mahindra bank said “The upside in gold is over. It had crossed $2000 per troy ounce. There will be correction now and I do not see any immediate trigger to touch $2000 level.”
In the spot market, gold was trading at Rs 52,528 per 10 gm, down by Rs 866 per 10 gm compared to yesterday’s closing price. Silver too, tumbled by Rs 624 per kg in the spot market and was trading at Rs 66,448 per kg.
Hareesh V, head of commodity research at Geojit Finance said “The market is expecting intermittent profit booking which may bring down the price of the yellow metal. However, the broad outlook for gold continues to be bullish.”
Added Anuj Gupta, deputy vice-president, commodities and currencies research at Angel Broking “Today we are seeing a profit booking in gold and silver on the back of no physical demand on higher levels and people are selling gold to book profit in higher levels. Strength in dollar on the back of expectation of package in US economy also curb the gold prices.”
Domestic gold and silver were trading weak as the US dollar rose after the minutes of the US Federal Reserve’s meeting were released. The minutes did not give any indication about possible changes in its stance in the future. The Fed said more fiscal stimulus may be needed to prop up economic activity. “This limited the downside in prices. Additionally, mounting US-China tensions could also turn investors back to the safe-haven asset,” said Sriram Iyer, senior research analyst at Reliance Securities.