top of page
Laxmi Diamonds.png

Gold prices fall today after sharp rise, silver follows suit

Gold and silver prices in India today fell after rising sharply on Monday. On MCX, gold October futures fell 0.24% to ₹38,088 per 10 gram. They had gained 1.7% on Monday.

Tracking a similar trend, silver prices on MCX fell 0.40% to ₹47,040, after a 3% rise on Monday. A similar trend was also witnessed in global markets. In global markets, gold was today trading flat at $1,498.13 an ounce after a sharp jump on Monday. Gold and silverprices had jumped sharply on Monday as the weekend attack on Saudi oil facilities increased Middle East tensions and pushed investors toward safe-haven assets. Gold is often used as a safe store of value during times of political and financial uncertainty. Investors returned for safe-haven assets like gold after weekend attacks on Saudi Arabia's oil facilities increased tensions in the Middle East, Yes Securities said in a note.

A fall in rupee's value against the US dollar has also increased the imported cost of gold. Gold traders are awaiting policy decisions from the US Federal Reserve and Bank of Japan, both due on Wednesday. Lower US interest rates put pressure on bond yields and the dollar, increasing the appeal of non-interest yielding gold.

Analysts expect gold investors to broadly remain on the sidelines ahead of an expected interest rate cut from the U.S. Federal Reserve on Wednesday and the next round of U.S.-China trade talks on Thursday.

A jump in oil prices is a negative for emerging markets such as India, which is the world's third-biggest importer of oil.

The rupee fell 68 paise to 71.60 against the US dollar on Monday amid concerns that higher crude prices following drone attacks on Saudi Arabia's oil facilities could put pressure on India's current account and fiscal deficit. The rupee slid to 71.86 against the US dollar today in early trade, extending recent losses. Gold and silver prices had witnessed a steep correction last week on the back of improved risk-on sentiment. A correction was also witnessed as they had run up sharply, said Navneet Damani, head of commodity research at Motilal Oswal Financial Services. He expects gold and silver prices to remain supported on the back of renewed global risk-off sentiment amid Middle East tensions.

High gold prices, which are up over 20% in India so far this year, has hurt domesticjewellery demand. Jewellers have also reported a higher supply of old gold jewellery. However, they hope that upcoming festive season will help lift jewellery demand.

Courtesy - Livemint



bottom of page