New Delhi: Weak demand from domestic jewellers and lower global prices sent gold rates lower today. Gold prices today fell by 190 to 32,000 per 10 gram. This is the second consecutive day gold prices have seen sharp declines. Gold rates had declined 160 on Saturday. Silver prices however remained steady today at 38,400 per kg. Muted end-of-the-wedding-season demand from local jewellers and buyers and weak overseas trend weighed on domestic spot gold prices, traders said.

In Delhi, gold of 99.9% and 99.5% purity dropped by 190 each to 32,000 and 31,850 per 10 gram, respectively. Sovereign gold prices, however remained steady at 25,000 per piece of 8 gram. Silver ready remained flat at 38,400 per kg, while silver weekly-based delivery declined by 124 to 37,930 per kg. Silver coins remained unchanged at 74,000 for buying and 75,000 for selling of 100 pieces.

In global markets, gold prices remained weak as the US dollar held firm below a 19-month peak and as investors awaited cues on US interest rate hikes from a Federal Reserve meeting this week. Spot gold was unchanged at $1,238.12 per ounce. Though the Fed is widely expected to hike rates at its December 18-19 meeting, bullion traders will be closely watching the future trajectory of US monetary policy.

Gold prices are likely to remain weak ahead of the Fed announcement, say analysts.

“Ahead of the FOMC (Federal Open Market Committee) meeting, we are going to see some downward movement... But the fact remains that the underlying strength in gold is likely to continue," says Kunal Shah, head of research, Nirmal Bang Commodities,

Higher US interest rates are negative for dollar-priced gold as they raise the opportunity cost of holding the bullion. The dollar index, which measures the greenback against other major currencies, was just below the 19-month high of 97.71 hit on Friday. Weaker-than-expected economic data from China and Europe have enhanced appeal for the US currency,

Spot gold prices could break the support at $1,232 per ounce, and fall to a lower support zone of $1,224-$1,228, says Reuters technical analyst Wang Tao.

With Agency Inputs

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