Gold Dips, Clinging to $1,700 Berth; India Lockdown Worries Buyers

Mumbai-India (Apr 25)  Gold’s delicate dance in the $1,700 zone continued Friday with the yellow metal’s slight retreat after rival dollar hit a near-three-week high.

But the safe-haven crowd has a bigger worry for the coming week: India’s continued lockdown amid the Covid-19 pandemic and how that would affect demand from bullion’s biggest supporter.

“Gold is going to have to face a little adversity over the next couple of trading days with the U.S. dollar making fresh new weekly highs overnight and with the world’s largest import country of gold on nationwide lockdown,” said Nicholas DeGeorge, senior market strategist for precious metals at RJO Futures in Chicago.

Gold is a sacred metal in India, whose ornamental value is second to none. Statues of HIndu deities in Indian temples are typically adorned with the yellow metal, which is also a staple expense at weddings. India’s central bank holds most of its reserves in gold and Indians generally wear gold jewelry in daily life and at social occasions, resulting in an annual import of 800 to 900 metric tons.

India’s second largest buying day of the year for gold comes up this Sunday and its lockdown “will surely impact physical demand” for the metal, DeGeorge said.

Gold futures for June delivery on New York’s COMEX settled down $9.80, or 0.6%, at $1,735.60 per ounce. For the week, though, it was up 2.3% after Wednesday’s strong move into $1,700 territory.

Spot gold, which tracks live trades in bullion, was down $6.07, or 0.4%, at $1,725.07 by 3:05 PM ET (19:05 GMT).

The dollar index, which pits the dollar against a basket of six currencies, was flat at 100.44 after hitting an 18-day high of 100.98 earlier.

Investing.com