After gaining for eight successive days, gold prices declined by Rs 611 to Rs 55,515 per 10 gram in the Mumbai market on the back of an appreciating rupee versus the dollar. Prices came under pressure after positive economic data from the US and China, but escalating tensions between the US and China capped the downside.

Tensions have flared up between the US and China after the former imposed sanctions on 11 Chinese officials for limiting political freedom in Hong Kong on August 7. China retaliated by applying sanctions on 11 US citizens in a tit-for-tat reaction on August 10.

Investors also kept a wary eye on China’s trade relations with the US after Trump signed two executive orders banning two popular Chinese apps.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.46 percent to 1,262.12 tonne on August 7.

The rate of a 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 41,636, Rs 50,852 and Rs 55,515, respectively, plus 3 percent GST.

“Bullion put up a great show last week, touching new highs every day as concerns over a worsening COVID-19 pandemic and intensifying US-China tensions underpinned the metal’s safe-haven appeal,” Navneet Damani, Vice President, Motilal Oswal, said.

He sees domestic prices hovering in the range of Rs 54,700-55,400. “The broader trend on the COMEX could be in the range of $2,025-2,050 per troy ounce.”

However, Ravindra Rao, VP-Head Commodity Research at Kotak Securities, warned that although gold is in a structural bull run, intermittent profit booking can’t be ruled out. “Support for the day stands at $2,024, below which bears might gain strength to pull it lower till $2,008/oz.”

The gold-to-silver ratio currently stands at 75.41 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices fell Rs 1,405 to Rs 73,608 per kg from its closing on August 7.

In the futures market, gold touched an intraday high of Rs 55,098 and a low of Rs 54,861 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,596 and a high of Rs 56,191.

Gold futures for October delivery gained Rs 287, or 0.52 percent, at Rs 55,076 per 10 gram in evening trade on a business turnover of 16,455 lots. The same for December delivery rose Rs 242, or 0.44 percent, at Rs 55,186 on a business turnover of 1,333 lots.

The value of the October and December contracts traded so far is Rs 2,792.07 crore and Rs 73.89 crore, respectively.

Similarly, Gold Mini contract for September edged higher Rs 251, or 0.46 percent at Rs 55,269 on a business turnover of 14,707 lots.

“Gold has given a negative breakout from the rising trend line channel, so prices may trend lower. Sustaining below Rs 55,000 would drag price lower towards Rs 54,700-54,600 levels intraday,” Axis Securities said.