Gold prices fall Rs 200 today on weak demand, silver follows
Gold prices plunged Rs 200 to Rs 31,400 per 10 gram due to weak demand from local jewellers and retailers despite strong global sentiment
New Delhi: Gold prices plunged Rs 200 to Rs 31,400 per 10 gram on Friday due to weak demand from local jewellers and retailers despite strong global sentiment, PTI reported. Global gold rates edged higher, lifted by a weaker dollar, but gains were capped by expectations of a US rate hike later this month. In Delhi, gold prices of 99.9% and 99.5% purity drifted lower by Rs 200 each to Rs 31,400 and Rs 31,250 per 10 gram, respectively. The metal had shed Rs 25 on Thursday. Sovereign, however, remained flat at Rs 24,500 per piece of eight gram.
In global markets, spot gold rate was up 0.4% at $1,206.01 an ounce by 3.30pm, having hit its highest since 28 August at $1,212.65 on Thursday. It has risen 0.9 percent so far this week, on track for its first weekly gain in three. US gold futures were up 0.3% at $1,211.70 an ounce. Gold prices have declined about 12% from a peak of $1,365.23 in April.
Physical gold buying waned in major Asian centres this week as bullion prices rebounded from recent lows, with dealers in India offering the metal at a discount for the first time in over a month as an uptick in local rates moderated demand. In India, the world’s second-biggest consumer of the metal after China, gold was being sold at a discount of up to $2 an ounce over official domestic prices this week, compared with a premium of $1 last week. The domestic price includes a 10 percent import tax.
“We’ve seen quite a bit of weakness in the dollar which has supported gold, but we’re not out of the woods yet,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “The fact that gains weren’t stronger has still got to do with gold’s focus on the Chinese renminbi, which remains a bit challenged, but also that the market is starting to look forward to the next U.S. rate hike.”
Following the yellow metal, silver prices fell by Rs 250 to Rs 37,650 per kg due to reduced offtake by industrial units and coin makers, added the report. Silver coins, however, continued to be traded at previous level of Rs 72,000 for buying and Rs 73,000 for selling of 100 pieces.
The Indian rupee and 10-year government bond prices on Friday rose after retail inflation for August fell below the Reserve Bank of India’s (RBI) medium term target of 4% for the first time in 10 months. So far this year, the rupee has weakened 10.9%, while foreign investors have sold $731.10 million and $6.37 billion in equity and debt markets, respectively.
The dollar index slipped to a 1-1/2 month low on Friday after weaker-than-expected U.S. inflation data and a recovery in emerging markets. The demand for the dollar eased this week on news that the White House had invited Chinese officials to restart trade talks.
With inputs from Reuters
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