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Gold prices fall for third consecutive day; silver weakens as well

Gold futures fell 0.11% to Rs 48,531 per 10 gram on Wednesday as participants offloaded their holdings on low spot demand.

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Gold fell on Wednesday as the formal start of US President-elect Joe Biden's transition to the White House and optimism over coronavirus vaccines dented bullion's safe-haven appeal.

Gold futures fell 0.11% to Rs 48,531 per 10 gram on Wednesday as participants offloaded their holdings on low spot demand.

On the Multi Commodity Exchange, gold prices for December delivery declined Rs 54, or 0.11%, to Rs 48,531 per 10 gram in a business turnover of 4,346 lots.

In the international market, gold was trading 0.10% lower at USD 1,809.10 per ounce in New York.

After weeks of waiting, President Donald Trump's administration on Monday cleared the way for Biden to prepare for the start of his administration, giving him access to briefings and funding.

"We're moving into a new phase in gold as vaccine developments are changing the regime of pandemic-caused disruptions and headwinds to growth that gold markets were pricing in," said Lachlan Shaw, National Australia Bank's head of commodity research.

"If US real long yields range trade around current levels, it's difficult to see gold breaking out and then sustaining a strong rally towards USD 1,900 and USD 2,000."

Silver futures also dropped Rs 131 to Rs 59,490 per kg on Wednesday as participants reduced their bets on low demand.

On the Multi Commodity Exchange, silver contracts for December delivery tumbled Rs 131, or 0.22%, to Rs 59,490 per kg in a business turnover of 10,245 lots.

Globally, silver traded 0.60% lower at USD 23.27 per ounce in New York.

Global equities scaled a record peak, bolstered by US President Donald Trump's go-ahead for Biden to start receiving daily intelligence briefings and an accelerating COVID-19 vaccine race.

But, Wall Street bank Goldman Sachs maintained its bullish near-term forecast for gold, terming the current correction a "churn" before prices go up again as "more evidence of inflation emerges."

Lower interest rates reduce the opportunity cost of holding non-yielding gold, which has gained more than 18% this year given its status as a hedge against likely inflation spurred by the massive stimulus unleashed globally.

(With agency inputs)

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