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Gold Prices In India Gain On Moody’s Downgraded Outlook On India

Olga Robert

Moody's change in outlook for India made bullion traders flock to the safe-haven metal, pushing gold prices in India higher on Friday.

On MCX, gold futures (December 2019) were trading 0.59 percent higher at Rs 37,767 per 10 grams while silver futures (December 2019) were up by 0.30 percent to Rs 44,300/kg.

The rise in prices appears to be a reaction to downgrade in Moody's credit ratings for India to negative from stable because unlike domestic rates, international gold prices fell on a rally in the stock markets seen on Thursday.

Spot gold was trading at 1,468.51 per ounce on Friday after a drop of 2 percent in the previous session to its lowest in more than a month. Gold prices in the international market declined after stocks rallied and the US dollar index gained on Thursday as China and the US agreed to roll back tariffs on each others' goods as part of the first phase of their trade deal.

The news curbed concerns over global economic growth slowdown, which is when traders are willing to bet on more riskier assets like equities.

On Friday, international rating agency, Moody's Investor Service cut India's credit rating outlook to negative, on mounting concerns over an economic slowdown. It said that India's ongoing economic slowdown may become "entrenched" and "long-lasting," despite government measures.

The Indian rupee opened lower against the US dollar, falling 0.48 percent to 71.20 against the American currency. Weakness in the rupee also makes the yellow metal expensive for buyers in India.

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