Precious metals prices have seen a sharp rise in the national capital. On Wednesday, gold prices rose by Rs. 4,800 increasing its price to Rs. 1.46 lakh per 10 grams. Gold and silver prices have risen due to increased buying due to festivals and rise in global markets. According to the All India Bullion Association, gold of 99.9 per cent purity rose by Rs 4,800 to Rs 1,46,600 per 10 gram (including all taxes) from Tuesday’s level of Rs 1,41,800 per 10 gram. Silver prices also saw a sharp rise. It is Rs. 9,000 increased to Rs. 1.93 lakh per kg (inclusive of all taxes), while in the previous session it was priced at Rs. 1.84 lakh per kg.
Why did the prices of gold and silver increase in Delhi?
Saumil Gandhi, Senior Commodity Analyst, HDFC Securities, said gold prices rose on Wednesday due to a strong recovery in international markets and increased demand due to festivals in the domestic market. According to Rajeev Sharan, head of research at Brickwork Ratings, this recovery in gold prices may come as a relief to buyers who are gearing up for the festive season. Gold prices recovered nearly 8 percent from their peak in October.
He attributed the recent drop in prices to a stronger US dollar, rising bond yields and dampened expectations of a rate cut by the Federal Reserve, which led to profit-booking by traders. Sharan said that compared to last Dhanteras, when gold prices jumped by around 65 per cent year-on-year, this time gold prices have increased by only 5-7 per cent since the last festive season. Due to which common people are seeing some stability in prices.
Condition of foreign markets
In international markets, spot gold rose $113.72 (or 3 percent) to $4,043.93 an ounce, again crossing the $4,000 mark. Silver prices also rose 4.5 percent to $52.03 an ounce. Praveen Singh, head of commodities at Mir Asset Sharekhan, said the dollar has weakened following the Democrats’ victory in the US mid-term elections, which has supported bullion (precious metals).
He said that with Democrats controlling both houses of Congress, regulatory scrutiny of the technology sector could increase and investment in data centers could slow, which could have a negative impact on the American economy. Jatin Trivedi, Commodity and Currency Research Analyst (VP) at LKP Securities, said investors will be watching the movement of the dollar, US bond yields and the Federal Reserve’s policy stance to determine whether the bullion rally will continue.
