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Gold prices fall today, down 1,800 from last month highs; silver rates down

Gold prices in India edged lower today, tracking a muted global trend. On MCX, gold futures prices fell 0.13% to ₹38,170 per 10 gram after rising 0.45% in Wednesday's trade.

Silver also struggled with prices on MCX falling 0.45% to ₹45,090. Gold prices have remained choppy over the past few days in India in tandem with a similar global trend. Last month, they had hit a new high of ₹40,000 as global prices had hit a new six-year peak of above $1,550 an ounce.

In global markets, gold prices were marginally higher by 0.1% to $1,490.37 per ounce, supported by renewed concerns about health of the US economy. Data released on Wednesday showed US retail sales fell for the first time in seven months in September. A gauge of manufacturing activity released earlier this month showed it cooling to a more than 10-year low in September as trade tensions weighed on exports.

However, the weak set of data has increased expectations that the US Federal Reserve will cut interest rate at its meeting later this month. Investors awaited further news on the US-China trade front. Lower interest rates and economic uncertainty boost the appeal of safe-haven assets like gold.

US Treasury Secretary Steven Mnuchin on Wednesday said that US and China trade negotiators are working on nailing down a Phase 1 trade deal text for their presidents to sign next month. Last week US had announced the first phase of a deal to end a trade war with China and suspended a threatened tariff hike.

Gold traders will also be watching progress at a European Union leaders' two-day summit in Brussels starting today to seal a deal on Britain's exit from the bloc.

Holding of SPDR Gold Trust GLD, the world's largest gold-backed ETF, fell 0.16% to 918.19 tonnes on Wednesday, from 919.66 tonnes on Tuesday.

Developments on Brexit and US-China trade deal may dictate the trend in gold prices in the near term, say analysts. tonnes. "Gold has been trading in a broad range as market players await more clarity on Brexit, US-China trade talks and Fed’s monetary policy. We expect choppy trade to continue as market players react to development relating to these issues however the general bias remains positive unless risk sentiment improves significantly," Kotak Securities said in a note.

Silver may witness choppy trade, says Kotak Securities, but expects buying interest to emerge at lower levels.

Courtesy - Livemint

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