Gold prices in India saw a sharp fall for the second day in a row. On MCX, gold for delivery in August contracts fell 0.45% to ₹34,235 – their fall for second straight day – mirroring a decline in global prices. On Tuesday, gold futures prices on MCX had come closer to ₹35,000 mark amid a global rally. In global markets, gold prices edged lower today after suffering a sharp fall in the previous session. Investors remained cautious ahead of US President Donald Trump and Chinese President Xi Jinping this weekend at the G20 summit.
Donald Trump said on Wednesday that a trade deal with China was possible this weekend. But he also warned that US is prepared to impose tariffs on virtually all remaining Chinese imports if the two countries continue to disagree.
Spot gold declined to $1,406.21 per ounce. In the previous session, gold prices fell more than 1% after US Federal Reserve officials pushed back on market expectations and presidential pressure for the central bank to deliver a significant US interest rate cut as soon as its next meeting.
Lower interest rates reduce the opportunity cost of holding non-yielding gold, prompting investors to sell some.
On the technical side, spot gold may stabilise around a support at $1,404 per ounce, and bounce towards a resistance at $1,421, according to Reuters technical analyst Wang Tao.
Also, putting downward pressure on gold is an uptick in US dollar, which is off from three-months lows touched earlier this week following comments from US Fed officials.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.22% to 797.85 tonnes on Wednesday.
Back in India, jewellers fear a fall in gold demand this year as record high domestic prices dent retail purchases. Lower purchases by India, the world’s second biggest consumer after China, could limit a rally in global prices that hit a 6-year high earlier this week.
India’s gold consumption dipped 1.5% in 2018 to 760.4 tonnes, below a 10-year average of 838 tonnes, according to data compiled by the World Gold Council.