New Delhi: Gold prices fell sharply today amid muted demand from local jewellers and a rise in rupee’s value against US dollar. Gold rates fell 210 to 31,850 per 10 gram while silver prices also slumped today on reduced offtake by industrial units. Silver rates declined by 435 to 37,880 per kg. In Delhi, prices of gold of 99.9% and 99.5% purities declined by 210 each to 31,850 and 31,700 per 10 gram, respectively. Sovereign, however, held steady at 25,000 per piece of 8 gram. Gold prices had risen 60 on Tuesday.

Tracking gold, silver ready today traded lower by 435 to 37,880 per kg, while weekly-based delivery was down by 448 to 37,433 per kg. Silver coins, however, were unchanged at 74,000 for buying and 75,000 for selling of 100 pieces.

Higher global gold prices today capped the fall in domestic gold prices. In global markets, gold prices rose to five-month high today, supported by a weaker dollar. Spot gold rate hit $1,251.35, the highest since July 11. Gold traders awaited cues on the rate hike trajectory of US Federal Reserve. The Fed is widely expected to raise interest rates today but slowing global growth may prompt it to tone down its stance on monetary tightening.

Gold has support at $1,240 and on the higher side resistance at $1,258, says Ajay Kedia, director at Kedia Commodities. A breach of $1,258 could take gold higher to $1,270 if Fed’s stance is dovish, he added.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, in which it is priced.

The rupee today extended gains and moved to 69.85 against the US dollar. On Tuesday, the rupee had logged its biggest one-day gain by rising 112 paise against US dollar. The dollar index, which measures the greenback against a basket of six major currencies, also was down 0.3% today. A higher rupee brings down the imported cost of gold in India.

With Agency Inputs