Snapping a four-day fall, gold prices rose today amid a weakening rupee and buying by jewellers to meet wedding season demand. But weak global prices capped gains in domestic prices. Gold prices climbed Rs 80 to Rs 32,150 per 10 gram while silver ended Rs 150 higher at Rs 38,150 per kg. Gold prices were on a downtrend last week, falling Rs 620 over four days. On Saturday, gold fell by Rs 180 to Rs 32,070 per 10 gram.
Today, in Delhi prices of gold of 99.9% and 99.5% purity recovered by Rs 80 each to Rs 32,150 and Rs 32,000 per 10 gram, respectively.
Sovereign followed suit and traded higher by Rs 100 to end at Rs 24,800 per piece of 8 gram. Similarly, prices of silver ready advanced by Rs 150 to Rs 38,150 per kg, while weekly-based delivery rose by Rs 235 to Rs 37,115 per kg. Silver coins, however, held steady at Rs 75,000 for buying and Rs 76,000 for selling of 100 pieces.
In global markets, the weak trend in gold prices continues. Gold prices fell to their lowest in one month as the dollar strengthened. Expectations that US Federal Reserve is on track to tighten borrowing costs also weighed on sentiment. Spot gold fell 0.3% to $1,205.
“The dollar is gaining strength after last week’s Fed meeting and positive U.S. economic data, which is weighing on non-yielding assets like gold,” said Hareesh V, head of commodity research at Geojit Financial Services.
The dollar index, which measures the greenback against a basket of six major currencies, was near 16-month peak, making bullion more expensive for holders of other currencies.
The Fed ast week reaffirmed its plan to raise interest rates in December, followed by two more potential rate hikes by mid-2019 on the back of an upbeat economy and rising wage pressures. Higher US interest rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding gold.
Globally, gold prices are down over 11% from its April peak after investors preferred the dollar as the US-China trade war unfolded against a background of higher US interest rates. But in India gold prices are up this year as the sharp fall in rupee has sharply increased the imported cost of gold. The rupee was trading near 73 a dollar today.
News Source: livemint.com