New Delhi, Oct 23 (PTI) Gold and silver futures recovered on Thursday after witnessing a sharp sell-off in the previous sessions, as traders indulged in value buying amid easing global tensions and improving
risk sentiment.
On the Multi Commodity Exchange (MCX), gold futures for December delivery increased by Rs 1,800, or 1.48 per cent, to Rs 1,23,657 per 10 grams in a business turnover of 13,158 lots.
Silver futures also rebounded after facing a sharp sell-off in the previous sessions, by surging Rs 2,727, or 1.87 per cent, to Rs 1,48,285 per kilogram in 20,868 lots.
On Wednesday, gold futures had plunged by Rs 6,414, or 5 per cent to close at Rs 1,21,857 per 10 grams while silver dropped by Rs 4,769, or 3.17 per cent to settle at Rs 1,45,558 per kilogram as profit-booking intensified after a strong rally.
The sharp fall also followed gains in the US dollar and fading safe-haven demand amid improving global risk sentiment, analysts said.
Commodity markets remained shut during the first half of Wednesday and resumed trading in the evening session.
On Tuesday, a special muhurat trading session, a symbolic one-hour trading exercise was conducted by stock and commodity exchanges, marked the beginning of Samvat 2082 this year. The session was conducted across BSE, NSE, MCX and NCDEX.
During the special one-hour Muhurat trading, gold futures had depreciated by Rs 2,353, or 1.8 per cent, to finish at Rs 1,28,271 per 10 grams against the Monday's closing of Rs 1,30,624 per 10 grams.
Silver also slumped by Rs 7,660, or 4.85 per cent, to end at Rs 1,50,327 per kg on Tuesday from the previous close of Rs 1,57,987 per kilogram on the MCX.
Analysts said gold and silver came under heavy selling pressure this week due to easing tensions between the US and China.
"At the end of the Diwali festival in India, the world's second-largest gold consumer, physical demand has eased, dragging prices lower. Expectations of progress on a potential US government funding deal and the upcoming inflation data further weighed on sentiment," an expert said.
Both gold and silver in the domestic futures trade had hit record highs of Rs 1,32,294 per 10 grams and Rs 1,70,415 per kilogram, respectively, on Friday on the commodities bourse.
On the global front, Comex gold futures for December delivery rose by USD 73.44, or 1.81 per cent, to USD 4,138.84 per ounce. It had hit a fresh peak of USD 4,398 per ounce on Monday.
"Gold prices are currently hovering around USD 4,130 per ounce-level on Thursday, amid continued selling pressure after repeatedly hitting record highs in recent weeks. The metal is now about 6 per cent below its peak, following its largest weekly drop in more than five years," Jigar Trivedi, Senior Research Analyst at Reliance Securities, said.
He noted that optimism over a potential US-China trade deal, ahead of talks between President Donald Trump and Xi Jinping and combined with Trump's recent more conciliatory remarks toward China, has reduced gold's safe-haven allure.
Despite the correction, Trivedi said gold remains up roughly 55 per cent for the year and over 5 per cent this month, supported by expectations that the Federal Reserve will implement two additional rate cuts by year-end.
"Geopolitical tensions also continue to provide aid, following the US announcement of fresh sanctions on Russia, coming after reports that the planned Trump-Putin summit was postponed after Moscow refused a Ukraine ceasefire," he added.
In the international markets, silver futures for December delivery went up 0.89 per cent to USD 48.10 per ounce.
Traders said silver prices moved higher after recent declines, supported by improved risk appetite and optimism over easing US-China trade tensions and progress on US government funding talks.
Last week, silver had hit an all-time high of USD 53.76 per ounce in the overseas markets, driven by a liquidity crunch in London's silver market, strong Indian demand, and bullish bets on industrial use such as EVs, data centres, and solar energy. PTI HG HVA
