Gold prices drop near lowest in a year, spur sales
- Gold's position according to the MCX April Futures on Monday was at ₹44,218/10 grams, on Tuesday was ₹44,857/10 grams, on Wednesday was ₹44,792/10 grams and on Thursday was ₹44,879/10 grams.
Gold prices hit another low on Friday after futures fell to ₹44,271 and was close to the near one-year low of ₹44,150 earlier in the week. Gold prices increased from ₹44,000 to almost touch ₹56,000 in August last year. And since then, gold is down about ₹12,000. At the beginning of this year, gold prices were above ₹50,000 per 10 gram and are now down about ₹6,000 per 10 gram.
Through this week, gold moved between the range of ₹44,218 and ₹44,900. Gold's position according to the MCX April Futures on Monday was at ₹44,218/10 grams, on Tuesday was ₹44,857/10 grams, on Wednesday was ₹44,792/10 grams and on Thursday was ₹44,879/10 grams.
The drop in gold prices has initiated fresh retail interest in the country and is being attributed to rising US bond yields, the roll-out of the anti-Covid-19 vaccine and expectations of expected economic recovery. However, according to a report in Reuters, dealers charged a premium of $6 dollars an ounce over official domestic prices which include import duty and GST. This premium was $5 last week.
The decrease in prices has resulted in improved sales of gold, Reuters said in its report adding that the price correction has resulted in investors putting money into gold ETFs as well.
In the international market, gold prices edged higher on Friday owing to a slight decrease in the dollar, Reuters reported. Spot gold was up 0.2 per cent at $1,724.16 per ounce after falling as much as 1.4 per cent earlier in the session. US gold futures settled down 0.2 per cent at $1,719.80.
Analysts believed that this was happening because of elevated yields. "It's basically a function of elevated yields and although yields aren't marching higher, the problem is they're not going lower, and that presents a problem," Stephen Innes, chief global market strategist at financial services organisation Axi, told Reuters.
(With agency inputs)