“Gold witnessed its sharpest one-day decline in over a decade this week, retreating more than 6 per cent as investors booked profits following a prolonged record-setting rally. The sell-off was largely technical, with prices failing to hold above the USD 4,300 an ounce level,” Riya Singh — Research Analyst, Commodities and Currency, Emkay Global Financial Services, said.
New Delhi: Gold prices are likely to witness some consolidation in the domestic markets next week as investors brace for a series of key central bank meetings and global trade developments, analysts said.
Investors will keenly follow the US Federal Reserve’s (Fed) policy outcome and remarks from Fed Chair Jerome Powell for cues on the interest rate decision.
The US President Donald Trump and his Chinese counterpart Xi Jinping’s meeting in South Korea, and the European Central Bank’s policy review on Thursday are also expected to steer the trajectory of precious metal prices, they added.
“Gold prices closed in negative for the first time in ten trading weeks, on profit-booking at recent tops, weakening physical demand in Asian centres like India & China, and further weighed by a stronger US dollar,” Pranav Mer, Vice President, EBG — Commodity & Currency Research, JM Financial Services Ltd, said.
He said physical demand in India weakened in the latter part of the week as buyers trimmed purchases in anticipation of a deeper price correction while lower prices sparked buying interest in China and Singapore.
On the Multi Commodity Exchange (MCX), gold futures for December delivery fell by Rs 3,557, or 2.80 per cent, during a holiday-shortened week.
“The latest selloff in gold prices follows profit-taking by investors amid a record run in the bullion market.
“Additionally, signs of a thaw in US-China trade relations and a possible positive outcome in trade talks between New Delhi and Washington have also bolstered the risk-off sentiment, pushing gold prices lower,” Prathamesh Mallya, DVP – Research, Non-Agri Commodities and Currencies, Angel One, said.
On the global front, Comex gold futures dropped USD 75.5, or 1.8 per cent, over the week. The yellow metal hit an all-time high of USD 4,398 per ounce on Monday but tumbled by USD 266.4, or 6.11 per cent, on Tuesday, marking its biggest one-day fall in over a decade.
“Gold witnessed its sharpest one-day decline in over a decade this week, retreating more than 6 per cent as investors booked profits following a prolonged record-setting rally. The sell-off was largely technical, with prices failing to hold above the USD 4,300 an ounce level,” Riya Singh — Research Analyst, Commodities and Currency, Emkay Global Financial Services, said.
She added that renewed optimism about US-China trade discussions and a firmer dollar also capped safe haven flows to gold.