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Gold, silver prices recover after initial plunge

Jan 11, 2021 (MENAFN via COMTEX) --

(MENAFN - IANS) Mumbai, Jan 11 (IANS) Futures of gold and silver recovered from the day's lows after a plunge during the initial trade on Monday.

Currently, the February contract of gold on the MCX is trading at Rs 49,109 per 10 gram, higher by Rs 142 or 0.29 per cent from its previous close.

The March contract of silver on the MCX is trading at Rs 64,659 per kg, higher by Rs 428 or 0.67 per cent.

The rebound in the futures of the metals come after they plunged on January 8 and the initial trade on Monday as the US dollar strengthened.

Ravindra Rao, VP, Head Commodity Research at Kotak Securities said: "Gold and silver have fallen amid steady US dollar index despite disappointing US non-farm payrolls data. The US 10-year bond yield has also risen to March highs reflecting optimism about the US economy and increased inflation expectations."

He also noted that the progress on the vaccine front as the UK approved Moderna's mRNA Covid-19 vaccine for emergency use also has weighed on the prices.

"Although the short-term moves remain choppy due to rising bond yields in the US on back of a smooth transition of power, higher future inflationary concerns might trigger a re-emergence of buying in the precious metal at lower levels," Rao said.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research said that hopes of stimulus in the US have pulled gold prices lower along with the US Treasury yields and bull run in equity markets.

He noted that the recent plunge came as investors pulled money from gold to invest US Treasury yields, which are at new highs of March.

"Hedge fund and some big investors are also exited in the gold position to chase crypto currency which is having marvelous run currently," Purohit said.

--IANS

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