Gold Drops Rs 1,400, Silver Slips on Stronger Rupee and Weak Global Cues
Gold prices fell by Rs 1,400 to Rs 1.49 lakh in the national capital on Tuesday and silver fell by Rs 200 as strong rupee and weak global trends put pressure on precious metals. The yellow metal, with 99.9 per cent purity, lost value of 1,49,250 rupees (including all taxes) per 1,400 rupees as compared to Monday. Closing level of Rs 1,50,650 per 10 grams.
Silver prices also fell by Rs 200 to Rs 2,39,800 per kg (including all taxes) after settling at Rs 2,40,000 per kg in the previous session.
“Gold prices continued their decline on Tuesday as investors maintained a cautious stance ahead of the Fed’s June meeting minutes and the second round of US-Iran peace talks, both of which are expected to give new direction to gold prices,” said Saumil Gandhi, Senior Commodity Analyst at HDFC Securities. he said.
Domestic bullion prices have also come under pressure as the rupee has appreciated sharply against the US dollar, analysts said.
“Gold prices remained weak after the rupee appreciated by 48 paise against the US dollar, which put pressure on domestic bullion,” said Jateen Trivedi, Vice President, Commodity and Currency Research Analyst, LKP Securities.
The rupee strengthened after Saudi Arabia lowered crude oil prices for Asian buyers, easing concerns about India’s import bill and increasing pressure on bullion, the official said.
In the international market, spot gold fell by $24.54, or 0.59 percent, to $4,140.59 per ounce, while silver fell by nearly 2 percent to $60.89 per ounce.
“Spot gold is trading lower in overseas trade as crude oil prices showed a minor recovery following attacks on ships in and around the Strait of Hormuz,” said Praveen Singh, Head of Commodities at Mirae Asset ShareKhan.
He said the attack had reignited concerns about the safety of ships passing through the Persian Gulf, sending crude oil prices up by more than 1 percent and pushing up U.S. Treasury bond yields and the dollar index, which in turn weighed on precious metals.
“Traders are awaiting the Federal Open Market Committee meeting minutes, ADP report, initial jobless claims and next week’s US inflation data for further clues,” said Kaynat Chainwala, AVP Commodity Research at Kotak Securities.
On the outlook, Praveen Singh said precious metals are likely to remain in range in the near term, but a positive tone could return if geopolitical tensions in West Asia remain under control.
