Gold prices in the national capital on Monday rose by Rs. 500 saw a modest recovery and it was Rs. 1,42,500 per 10 grams was reached. Pre-Diwali buying by jewelers and retailers supported gold at a time when its prices had fallen significantly after a heavy sell-off in October. Gold of 99.9 per cent purity closed at Rs 1.42 lakh per 10 grams on Saturday. At the same time, according to local traders, the price of silver per kg (including all taxes) was Rs. remained stable at 1.86 lakh.
Traders said jewelers and retailers have stepped up purchases ahead of the festival, giving some support to gold and silver prices in the domestic market. The weakening of the rupee against the US dollar also boosted the price of precious metals in dollar terms. This recovery has taken place after a sharp decline in October. On September 30, gold was priced at Rs 1,49,300 per 10 grams, down by Rs 7,300 during October. Silver also saw a major decline during this period, the price per kg of which was Rs. 2.32 lakhs down to Rs. 46,000 was done.
Gold and Silver in Foreign Markets
Gaurav Garg, head of research at brokerage firm ‘Lemon’, said that an attempt at recovery was seen in gold prices on Monday after the heavy sell-off seen at the end of October. He added, however, that pressure from higher oil prices still remains on precious metals. In global markets, spot gold rose $24.18 (about 1 percent) to $3,899.73 an ounce, while silver rose more than 2 percent to $50.25 an ounce. This recovery in gold has taken place after a heavy fall on Friday. On Friday, gold fell nearly 4 percent to $3,875.55 an ounce, the lowest level in a year.
How can gold move in the future?
Jatin Trivedi, Commodity and Currency Research Analyst (VP) at LKP Securities said spot gold prices in global markets improved on Monday and touched around US$3,900 an ounce. The market environment remained subdued due to the possibility of higher interest rates and uncertainty over the results of the US election on November 3. He further said that investors are cautious and markets are likely to remain volatile as they assess US monetary policy and the results of the mid-term elections.
According to Praveen Singh, Head of Commodities at Mire Asset Sharekhan, crude oil prices fell by 4 percent. The drop comes amid reports that US President Donald Trump is willing to give diplomacy another chance to resolve the standoff between Washington and Tehran. Singh expects consolidation in the market. Further price weakness cannot be ruled out in the near future, as tensions in West Asia persist and prices remain below the US $4,000 per ounce level.
