Gold price falls for 2nd day; down Rs 1,600 from record high

Andrew Cummings
August 14, 2020

Gold gained around 0.50 percent and settled at $2,030.30 per troy ounce, while silver gained more than 6 percent and settled at $29.26 per troy ounce.

Historical precedent appears to suggests so, only once in history was silver more undervalued compared to gold than it was in April 2020 and that was in 1933, when the US Government forced its citizens to sell their precious metal holdings.

"Risk appetite returned following encouraging economic numbers and news reports of a new effective coronavirus vaccine in Russian Federation increased risk appetite further lowering expectations of further monetary stimulus making Gold less attractive", said a note by brokerage Phillip Futures. Silver Futures have hit a lifetime high of Rs 77,949 in last Friday's session.

GLD has lured nearly US$21 billion in cash this year - the second-biggest intake in the US$4.6 trillion U.S. ETF market, according to data compiled by Bloomberg.


Previously the highest the ratio has ever been was 132 to 1 in 1933 when the United States government invoked Executive Order 6102 and forced U.S. citizens to sell all but a small portion of their gold and silver holdings to the Federal Reserve.

"Precious metals are also getting support from geopolitical tensions, record surge in coronavirus cases and fear of lower global growth".

Overall, the bull market in precious metals remains intact.

In New Delhi, the price of 22-carat gold rose to Rs 54,100 per 10 gram, and in Chennai to Rs 53,580.


In the worldwide market, gold was trading with gains at Dollars 1,930 per ounce, while silver was quoting at USD 25.70 per ounce.

Technically, LBMA GOLD Spot traded in a range of $2,019-$2,049 levels where it ended on a negative note below $2,030 levels.

COMEX gold December contract trades 0.5 percent lower near $2,025/oz after a 0.6 percent gain in the previous session.

The gold-silver ratio indicates how many ounces of silver are required to buy one ounce of gold.


However, supporting price is increasing US-China tensions and rising virus cases globally. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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