NEW DELHI, Sept (Economic Times): Gold and silver saw profit booking by traders on Tuesday, in line with global cues, but losses were capped by worries over economic recovery.
Japan's economy shrank more than initially estimated in the second quarter, while German industrial output rose far less than expected in July, suggesting Europe's largest economy faces a slow return to pre-pandemic production levels.
Gold futures on Multi commodity exchange (MCX NSE -2.10 per cent) were down 0.42 per cent or Rs 216 at Rs 50,849 per 10 grams. Silver futures dipped 0.53 per cent or Rs 363 to Rs 67,908 per kg.
In the previous session, gold futures had risen 0.7 per cent, snapping a three-day losing trend, while silver futures had surged 1.6 per cent. Both gold and silver have corrected sharply from last month's highs. Gold is down over 5,000 per 10 gram from August highs while silver remains about 10,000 per 10 gram lower.
In global markets, gold prices fell today, hurt by a strong US dollar though surging coronavirus cases across the globe capped losses. Spot gold was down 0.2 per cent at $1,925.68 per ounce. The dollar index rose 0.45 per cent against its rivals, making gold more expensive for holders of other currencies.
Supporting gold at lower levels is rising coronavirus cases globally and increased US-China tensions, say analysts.
News reports said that Trump administration may impose sanctions on China's biggest chipmaker, SMIC, a move that raises the possibility of retaliatory action from China.
On other hand, directionless and volatile trade in gold has pushed investors to the sidelines with gold holdings with SPDR ETF, the world's biggest gold-backed exchange traded fund, remaining flat, Kotak Securities said.
Consumer demand also remains weak in key markets such as India and China, say analysts.
"Gold may witness choppy trade as US dollar and US equity market struggle for direction, " Kotak said recommending buy-on-dips amid persisting challenges to global economy.
