Gold prices in the national capital fell for the third consecutive day on Wednesday. A strengthening rupee put pressure on the precious metal and prices rose to Rs. 1,800 to Rs. 1.5 lakhs per 10 grams has come down. According to the All India Bullion Association, the price of 99.9 per cent pure gold fell by Rs 1,800 to Rs 1,50,800 per 10 grams (including all taxes), while it closed at Rs 1,52,600 per 10 grams on Tuesday. Silver prices also continued to fall and Rs. 5,000 reduced to Rs. 2.21 lakh per 10 grams (inclusive of all taxes), while last time it was Rs. 2.26 lakh per kg was closed.

How much did the price fall in three days?

From October 9, gold prices rose by Rs. 3,600 and silver prices at Rs. 7,500 down, indicating a huge level of decline in the domestic bullion market. The rupee strengthened by 19 paise to close at 95.17 against the US dollar. This was the fourth consecutive session when the rupee appreciated. This was supported by RBI measures aimed at reducing near-term demand for the dollar and limiting speculative foreign exchange risks. Traders say a strengthening rupee makes imports of dollar-denominated precious metals cheaper, putting pressure on domestic prices, while investors also monitor international market movements.

Why gold became cheaper in Delhi?

Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, said that gold prices continued to decline in the domestic market on Wednesday due to weak global cues and a strong rupee. According to Pankaj Singh, Founder and Principal Researcher and Smallcase Manager at SmartWealth.ai, festive demand in India and continued buying from China could hold back the decline, though a stronger rupee could limit domestic prices. Singh said the near-term outlook is cautious and currency movements along with international gold prices will be important in determining returns for Indian investors.

Gold and silver have become cheaper in foreign markets

Globally, spot gold prices fell $20.51, or 0.49 percent, to $4,140.69 an ounce. Silver fell more than 1 percent to $58.49 an ounce, near a three-month low. The white metal was last trading around $58.40 an ounce on July 27. Vedika Narvekar, Commodities and Currencies Research Analyst at Anand Rathi Share and Stock Brokers Limited said that gold is showing weakness on Wednesday. It fell below $4,150 an ounce to a new weekly low. He said gold has been trading in a tight range for the past two weeks, while the dollar has eased slightly from its 18-month high but remains strong, putting pressure on the precious metal. Narvekar further said that everyone is waiting for US inflation data before forming any firm view on precious metals.