Gold prices fall further today but silver rates recover

New Delhi-India (Nov 29)  After falling Rs 290 on Wednesday, gold prices declined further today, extending its fall to the second day. Gold prices today fell by Rs 20 to Rs 31,540 per 10 gram amid higher rupee and tepid demand from local jewellers. However, higher global prices capped the fall in domestic gold prices. On the other hand, silver rates today recovered by Rs 60 to Rs 37,160 per kg. Prices of gold of 99.9% and 99.5% purity fell further by Rs 20 each to Rs 31,540 and Rs 31,390 per 10 gram, respectively. Sovereign gold, however, held steady at Rs 24,700 per piece of 8 gram.

Prices of silver coins were steady today at Rs 72,000 for buying and Rs 73,000 for selling of 100 pieces. On the other hand, silver ready recovered by Rs 60 to Rs 37,160 per kg and while weekly-based delivery by Rs 82 to Rs 35,864 per kg.

The rupee gained sharply today against the US dollar, rising to below 70 levels. The rupee hit a three-month high of 69.85 against the US dollar today. Higher rupee makes prices of imported gold cheaper.

In global markets, gold prices firmed up, shaking off some of recent weakness. Spot gold was up 0.4% at $1,225.34 per ounce as the dollar faltered following dovish comments from US Federal Reserve Chair Jerome Powell, calming investor concerns over the pace of rate hikes.

“We are seeing very good resistance for gold at $1,240-$1,242 levels,” said Vandana Bharti, assistant vice-president of commodity research, SMC Comtrade Ltd, adding that the bullion was well supported near $1,200.

The dollar, against the basket of other major currencies, slipped from a two-week high after Powell said interest rates are just below neutral, raising expectations that the US central bank is closer to the end of its rate hike cycle. A weaker greenback makes the dollar-denominated gold cheaper for other non-US buyers. On the other hand, higher US interest rates tend to boost the dollar, and also increase the opportunity cost of holding gold, which does not pay interest.

However, the recent buoyancy in riskier assets like equity capped gains in gold, analysts said. Most of the Asian markets closed higher today while back home Sensex rallied over 450 points.

Gold traders will be watching for more clues on the Fed’s monetary tightening path from the minutes of the US central bank’s November 7-8 meeting, due later today. Also, markets will be focusing on the G20 summit in Buenos Aires this weekend, where US President Donald Trump and his Chinese counterpart, Xi Jinping are scheduled to discuss trade matters.

LiveMint

Silver Phoenix Twitter                 Silver Phoenix on Facebook