Gold prices in the national capital on Monday rose to Rs. 1,400 reduced to Rs. 1.53 lakh per 10 grams as the rupee strengthened and weakness in the global market put pressure on local bullion rates. On Friday, the price of 99.9 per cent pure metal closed at Rs 1,54,400 per 10 grams. According to the All India Bullion Association, the price of silver has also increased by Rs. 2,26,500 reduced (inclusive of all taxes) to Rs.

Why gold and silver became cheap?

Saumil Gandhi, Senior Commodity Analyst at HDFC Securities, said that gold prices remained soft in the domestic market on Monday due to weak global market cues, while a strengthening Indian rupee put further pressure on the prices of the precious metal. The rupee strengthened 96 paise – its biggest one-day gain in six months – to close at 95.75 against the US dollar after the Reserve Bank of India took several steps to strengthen the local currency. Gandhi said that material demand was mixed; Domestic gold purchases remained subdued due to the surge in prices, while demand was expected to improve after the holidays in China.

A slight decline in foreign markets

In the international market, gold was down $17.36, or 0.41 percent, at $4,176.88 an ounce, while silver was trading marginally lower at $60.66 an ounce. Gaurav Garg, head of research at brokerage platform Lemon, said that gold was trading at a low level of $4,179 an ounce in the global market despite softening oil prices. The US dollar index remained near its 18-month high, limiting upside potential for the precious metal.

Gold’s short-term outlook strong

Garg said crude oil prices fell as expectations of increased energy supplies from Russia eased immediate supply concerns. However, renewed tensions in West Asia and threats to regional shipping continued to fuel volatility in oil prices. According to Vikram Subburaj, CEO of investment platform Giottus.com, the short-term outlook for gold is still strong, while more caution is needed given silver’s slower growth. He said investors will be watching the dollar, US bond yields, rupee and upcoming inflation data before considering this latest change as a long-term trend.