Gold prices fall to Rs 51,454 per 10 gram, silver plunges to Rs 64,594 a kg

Gold prices continued its decline for the sixth day falling to Rs 51,454 from Rs 51,628 per 10 gram while silver prices also fell to Rs 64,594 from Rs 64,881 per kg, according to Indian Bullion and Jewellers Association. 

Gold jewellery prices vary across India, the second-largest consumer of the metal, due to excise duty, state taxes, and making charges.

In New Delhi, prices of 22-carat gold plunged sharply to Rs 51,250 from Rs 51,700 per 10 gram in the previous trade while price of 24-carat was at Rs 54,870. In Chennai, the rate for 22-carat dropped below the Rs 50,000-mark to Rs 49,480 while for 24-carat it was Rs 54,050. In Mumbai, 10 gram 22-carat was retailing lower at Rs 50,350, according to Good Returns website.

On MCX, gold futures for October skidded 0.51% to Rs 51,009 per 10 gram. Silver futures for September plunged 2.13% Rs 64,175 per kg. After the recent correction, gold prices are down over Rs 5,000 from this months's high of Rs 56,200 while silver has tumbled about ₹13,825 from record highs of ₹78,000. 

Spot gold prices for 24 carat in Delhi continued to decline and fell by Rs 557 amid stronger rupee, HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

In the international market, gold prices fell on Tuesday as growing optimism about U.S.-China trade relations boosted risk appetite as investors awaited a speech by Federal Reserve Chair Jerome Powell this week.

Gold was quoting marginally higher at $1,930 per ounce, while silver was flat at $6.45 per ounce.

"Gold prices traded steady on weaker dollar and worries over rising virus cases in Asia and Europe. However, positive sentiments over signs of resumption in the US-China trade talks kept upside limited in the prices," Patel added.

Navneet Damani, VP Commodities Research, Motilal Oswal Financial Services said, "Gold prices had recouped some of the losses in yesterday's session although it failed to show strength and edged lower. Movement in dollar and hopes for coronavirus treatment is responsible for the volatility in precious metal.

The benchmark S&P 500 opened at a record high on Tuesday as U.S. and Chinese officials reaffirmed their commitment to a Phase 1 trade deal, adding to optimism over progress in developing treatments for Covid-19.

On Sunday, U.S. President Donald Trump hailed FDA authorization of a virus treatment that uses blood plasma from recovered patients.

Global central banks and governments have pumped in massive monetary and fiscal stimulus to prop up their virus-hit economies, which has helped bullion gain over 25% so far this year.

"The underlying fundamental pillars haven't wavered; we're still in the midst of the virus concerns, massive stimulus efforts that goes along with it. We can see short term pull back but we don't see that changing the big picture," Meger added.

Meanwhile, investors are awaiting Powell's speech at a gathering of central bankers in Jackson Hole, Wyoming, on Thursday, where he is expected to provide further clarity on the U.S. central bank's monetary policy stance.