Domestic gold futures tanked more than 1 per cent on Wednesday to quote below the Rs 50,000 mark, tracking global benchmark rates amid continued strength in the US dollar. Multi Commodity Exchange gold futures fell by as much as Rs 721 - or 1.43 per cent - to hit Rs 49,660 during the session. Comex gold futures - the global benchmark for the yellow metal - cracked below the $1,900 per ounce mark to a six-week low of $1,876.10 per ounce, as the dollar jumped to an eight-week high against a basket of currencies.
Here's what analysts say on the current gold rates:
Ravindra Rao, VP-head commodity research at Kotak Securities:
“Weighing on gold price is persistent strength in US dollar index which has tested the highest level since late July. Gold's sharp fall earlier this week has dented market sentiment and while positive factors persists a sustained rise may not come until there is a major correction in the US dollar."
Nish Bhatt, founder and CEO, Millwood Kane International:
"As gold is an international commodity and a rally in the US dollar affects its prices. Further stimulus is crucial as the Fed chairman in its testimony to Congress said that more government spending will be required to sustain the growth rate. Fears of a second lockdown in Europe is also one of the reasons for the fall in gold."
“The dream run for gold has hit a roadblock... The primary reason for the fall in gold prices is the rally in the dollar index, uncertainty over the next stimulus package by the US government to help give a push to the slowing growth rate."