Gold prices set to witness biggest monthly fall in 4 years

Gold prices today dropped down in global markets and remained on the path downhill for its worst month in four years as optimism over a coronavirus vaccine-led economic rebound took some focus off the safe-haven assets like gold. Spot gold fell 1.2% to $1,766.26 per ounce. For this month, gold slipped down about 6%, its biggest monthly decline since November 2016.

Gold and silver prices fell in Indian markets last week, in lieu of the global climate. On MCX, gold futures tumbled down 0.85% on Friday to settle at ₹48,106 per 10 gram while silver futures dropped 1.3% to ₹59,100 per kg. Gold prices in India are down about ₹8,000 from record highs of ₹56,200 hits in August.


Also, an additional impetus to risk sentiment was data that reflected China’s factory expansion at the fastest pace in more than three years in November. Covid vaccine optimism pushed the dollar to a more than two-year abyss and pushed world stocks for a record month of gains. Gold traders will eye Congressional testimony by U.S. Federal Reserve Chairman Jerome Powell this week, for clues on the likely direction monetary policy might take.

“Weighing on the gold price is general optimism relating to the vaccine for COVID-19, easing political chaos in the US amid smooth transition of Biden administration to power and continuing ETF outflows. Gold holdings with SPDR ETF stand near the lowest level since July. We may see choppy trade amid lack of fresh triggers and one should wait for higher levels to create fresh short positions,” Kotak Securities said in a note last week.