Gold prices fall for third day, silver rates slump
Prices of gold 99.9% and 99.5% purity today fell to Rs 32,250 and Rs 32,100 per 10 grams
New Delhi: Gold prices today fell for the third day, pushed lower by muted domestic demand and weak global cues. Gold rates fell by Rs 150 to Rs 32,250 per 10 grams, its third straight loss. Silver prices too fell sharply today after they declined by Rs 600 to Rs 38,400 per kg. The bullion market in Delhi was closed on Thursday on account of ‘Govardhan Pooja’. Gold prices had declined by Rs 210 to Rs 32,400 per 10 grams during special ‘Diwali Muhurat’ trading on Wednesday.
In Delhi, prices of gold 99.9% and 99.5% purity fell to Rs 32,250 and Rs 32,100 per 10 grams. Sovereign also weakened by Rs 100 to Rs 24,700 per piece of eight grams. Similarly, silver ready rates today fell by Rs 600 to Rs 38,400 per kg and weekly-based delivery dropped by Rs 558 to Rs 37,570 per kg. Silver coins too went down to Rs 75,000 for buying and Rs 76,000 for selling of 100 pieces.
In global markets, spot gold prices were down at $1,219.7 per ounce. Gold prices were under pressure after US Federal Reserve signaled that it will continue to raise interest rates. At the conclusion of its two-day meeting on Thursday the Fed kept its rate unchanged but indicated a hike in December. Higher interest rates raise the opportunity costs of holding gold, which does not pay interest and incurs costs to store and insure. The Fed has already hiked rates three times this year.
Gold also weakened due to a stronger dollar. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1%, having climbed about 0.8% in the previous session.
A stronger dollar curbs demand for gold as an alternative asset. A stronger dollar and higher interest rate in the US have pushed down global gold prices almost 6% this year. But in India, gold prices have rallied this year as the sharp fall of the rupee against US dollar has pushed up imported cost of gold. Rupee is down around 12% so far this year against the US dollar.
Analysts say that $1,200 is an important level for gold. “With a firmer dollar and the uncertainty of the mid-terms behind us, we see a move through the 100-day moving average and test $1,208-$1,210, with the potential for the psychologically important $1,200 to come into play,” traders at MKS PAMP said in a note.
With Agency Inputs
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