Goodwill Investor Education Eagle’s Eyes – Stock Market Review. “Precious Metals Crash-So what, for Stock investors?”

Gold and Silver Prices crash- MCX Index down: So what, for Stock Investors?

Investors have some good news in the market- particularly for those in Stock markets. After a long, strong and upward movement by glittering Metals like Gold and Silver, now their prices have crashed substantially and their Indices have fallen flat -3 % to  5 %. After the Sensex and Nifty  have touched the 5 Month peak yesterday on Global cues and particularly the Covid vaccine release by Russia for the first time, S & P 500 near Life time High over stimulus and vaccine, U S Dollars holds due to Trump’s announcement  of his intent to reduce the capital gains taxes and $ Index is strong.

Gold and silver prices in India fell today, extending the previous session’s slump. On MCX, October gold futures were down 3% or ₹1,500 to ₹50,441 per 10 gram. Silver futures on MCX tumbled 5% or ₹5,000 per kg to ₹61972. In the previous session, gold prices collapsed nearly 6% or ₹3,200 per 10 gram while silver crashed 12% or ₹9,000 per kg. Last week, gold prices in India had jumped over ₹56,000 while silver had almost touched ₹78,000.

In global markets,Gold prices continued their fall today. Spot gold sank as much as 2.1% to $1,872.61 an ounce while US futures were below $1,900. Silver futures also dropped sharply, and were down 7% at $24.2 an ounce.

On MCX, gold has support in the ₹50450/49200 zone while resistance at ₹53,600,

After rising above $2,000 an ounce last week, gold’s has suddenly collapsed as US bond yields advanced and the dollar rebounded. The dollar index today held steady against a basket of major currencies.

The sharp drop in gold prices has triggered outflows from gold ETFs. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund or gold ETF, said its holdings fell 0.3% to 1,257.93 tons on Tuesday.

The global risk sentiment improved after President Vladimir Putin said Russia cleared the world’s first Virus vaccine for use though the vaccine is set to enter final trial.

Some analysts say that the trigger for the collapse was the news about Russian Covid drug which led to some profit-taking.

“Gold rallied sharply in last few days without any major correction and this pushed it deep into overbought territory. With US dollar index attempting some recovery, we may see some correction in gold,” Analysts opine.

Gold had turned into a favorite asset class as the coronavirus pandemic pummeled the global economy, prompting central banks and governments to deploy massive stimulus.

So Investors are advised to go in for GOLD ETF fund investment for a medium term gain. As the Precious Metals are down, the Investors will turn to  Stock markets and MFs to park their investible funds, so there will be demand for good scripts and let us also sail with them to reap short term benefits.

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