Domestic Gold Futures Drop 4%, Below Rs 50,000 As Global Rates Tumble
Current Gold Price In India: MCX gold futures fell to as low as Rs 49,955/10 grams during the session
Gold Price In India: Domestic gold futures fell nearly 4 per cent to trade briefly below the Rs 50,000 mark on Wednesday, as the global rate slid below $1,900 per ounce. Multi Commodity Exchange (MCX) gold futures - due for an October 5 delivery - dropped by as much as Rs 1,974 - or 3.80 per cent - to Rs 49,955 in morning deals. At 10:12 am, the MCX gold futures contract quoted at Rs 50,293, down Rs 1,636 - or 3.15 per cent - from its previous close. (Track Gold Price Here)
In the international market, the price of gold fell below the $1,900 per ounce level as a resurgent dollar prompted investors to reassess their positions after a record-breaking price rally.
Spot gold declined 2 per cent to a near three-week low of $1,872.19 per ounce, resuming its free fall after a brief hiatus in early trade. It was last seen trading 1.1 per cent lower at $1,889.59 per ounce, extending losses after a 6 per cent plunge on Tuesday.
Gold has been one of the most consistent gainers through the six months of coronavirus-led turmoil in financial markets, benefiting from a flood of capital into the world economy and investors seeking a relatively safe location to park money with interest rates at or near zero.
Typically, any sign of uncertainty in the financial markets boosts the appeal of gold as a safe-haven bet, as investors rush away from riskier asset classes.
(Also Read: Gold's "Dream Run" May Continue, Say Analysts)
(Gold futures had risen to an all-time high of Rs 56,191 last week)
The closing rate of gold jewellery stood at Rs 53,951 per 10 grams on Tuesday, excluding GST, according to Mumbai-based industry body India Bullion and Jewellers Association (IBJA). Gold jewellery prices vary in different parts of the country, due to factors such as taxes and making charges.
What Analysts Say
"MCX gold slumped over 5 per cent yesterday reflecting weakness in international market, firmness in the Indian rupee and weaker physical market demand. After days of up move, gold has finally shown some correction and a drop below $2000/oz has led to extended losses," said Ravindra Rao, VP-head commodity research, Kotak Securities.
The dollar index - which gauges the greenback against six currencies - was last seen trading 0.25 per cent higher, having risen as much as 0.30 per cent on Wednesday.
"With the sell-off, the momentum has weakened and we may see some extended losses,” he added.