Gold plunges Rs 1,100 to Rs 71,700 per 10g; silver plummets Rs 2,200

06 August,2024 05:54 PM IST |  Mumbai  |  mid-day online correspondent

All India Sarafa Association, silver prices fell by Rs 2,200 to Rs 82,000 per kg in the fourth session, down from Rs 84,200 per kg in the previous transaction

Pic/Ashish Raje


Gold prices fell by Rs 1,100 to Rs 71,700 per 10 grams in the national capital on Tuesday due to low demand from jewellers. The previous session's closing price for 10 grams of the precious metal was Rs 72,800.

According to the All India Sarafa Association, silver prices fell by Rs 2,200 to Rs 82,000 per kg in the fourth session, down from Rs 84,200 per kg in the previous transaction. Silver prices have decreased by Rs 4,200 per kg in four sessions since August 2, when they stood at Rs 86,000 per kg, reported PTI.

According to the report, additionally, gold of 99.5 per cent purity fell Rs 1,100 to Rs 71,350 per 10 grams from Monday's closing price of Rs 72,450 per 10 grams. Traders ascribed the price decrease to reduced demand from jewellers and retail buyers.

Dilip Parmar, Research Analyst at HDFC Securities, stated that the rupee's depreciation and increased physical demand ahead of the festive season are expected to support domestic gold prices. He noted that global uncertainty, central bank demand, and low interest rates are all positive for gold prices, the report added.

Reportedly, in international markets, gold at the Comex declined by USD 20 to USD 2,409 per ounce. Manav Modi, Senior Analyst of Commodity Research at Motilal Oswal Financial Services, noted that gold lost more than 1 per cent on Monday due to a worldwide market sell-off triggered by economic concerns and the unwinding of the Yen carry trade. However, geopolitical worries and prospects of rate cuts are cushioning prices.

"The Bank of Japan (BOJ) had a negative interest rate for more than 18 years, and a sudden increase in interest rates reduced the rate differential between Japan and the US, influencing a carry trade unwinding, and increasing pressures in major asset classes," Modi said.

A weaker dollar is also helping metal markets, as bad US economic data has led traders to expect further cuts in US interest rates this year. Further negative economic data from the United States has alarmed market investors and raised concerns that the US economy may slow faster than projected, Modi added per the news agency report.

Similarly, silver fell to USD 26.94 per ounce in New York. Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, stated that Comex Gold (December) futures fell amid a tumultuous trading environment, reflecting a larger market sell-off across many asset classes. Financial markets are beginning to price in a probable US recession, with the Federal Reserve (Fed) expected to slash interest rates in September following weak manufacturing and employment figures, the PTI report stated.

"Gold prices rebounded, closing the session above USD 2,440 per ounce on Monday, supported by a weak US dollar and softer Treasury yields," Chainwala added.

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