Gold and silver prices fell in the national capital on Wednesday. A strong rupee, high crude oil prices and a weak global outlook dampened investor sentiment. According to the All India Bullion Association, the price of gold of 99.9 per cent purity fell by Rs 1,300 to Rs 1,49,000 per 10 grams (including all taxes). Gold closed at Rs 1,50,300 per 10 grams in the last session. After remaining stable for two consecutive sessions, silver prices rose to Rs. 1,600 reduced to Rs. 2,13,400 per kg. On Monday silver Rs. 2,15,000 per kg was closed.
Market trend weak
Jatin Trivedi, Commodity and Currency Research Analyst (VP) at LKP Securities said gold remained weak on Wednesday as a stronger rupee kept pressure on domestic prices. He further said that the overall market sentiment is subdued amid concerns of a strengthening rupee and higher crude oil prices adding to inflationary pressures. The rupee on Wednesday strengthened by 48 paise to close at 94.43 (provisional) against the US dollar on Wednesday due to RBI’s intervention to curb dollar demand.
Ashish Rajodia, Head of Commodities, PL Capital, said that silver prices have declined in the domestic market as well. Initial expectations of an Iran peace deal led to a drop in crude oil prices, which supported precious metals for some time. This gain ended when crude oil prices rose again. This comes as Iran says there is little hope of a diplomatic breakthrough with the US.
What will happen next?
In global markets, gold remained steady at US$4,127.68 an ounce, while silver fell 0.48 percent to US$57.72 an ounce. Spot gold was trading steady around US$4,126 an ounce, while silver fell to US$57.10 an ounce after reaching US$58.60 in the previous session, said Kainat Chenwala, AVP of Commodity Research at brokerage platform Kotak Neo.
He added that higher oil prices are complicating the monetary policy outlook, although weakness in the US dollar and Treasury yields have prevented major losses in precious metals. Chenwala said there is no major economic data coming from the US, so in the next few sessions, only movements in the bond market and changes in crude oil prices will dictate the direction of business. After this, all eyes will be on the Federal Reserve’s October policy meeting next week.
