On Wednesday, gold prices in the national capital fell for the second consecutive session. Due to the Diwali holidays, the market was less traded, which affected the gold prices, which fell by Rs. 800 reduced to Rs. 1.45 lakh had become. According to local traders, the price of 99.9 percent pure gold on Tuesday was Rs. 1,46,400 per 10 grams (inclusive of all taxes) to Rs. 800 reduced to Rs. 1,45,600 per 10 grams. Silver prices also saw a decline. After staying flat for two sessions, silver prices rose to Rs. 5,000 reduced to Rs. 1,87,500 per kg (inclusive of all taxes), compared to Rs. 1,92,500 per kg.
Why did the prices of gold and silver fall in Delhi?
Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, said business in domestic markets was very subdued due to Diwali holidays, which affected gold prices and they fell on Wednesday. Many local markets also remained closed. Gandhi said there is uncertainty over precious metals due to persistent inflation and hawkish signals from the US Federal Reserve. This could keep the dollar and treasury yields high, limiting the chances of a gold recovery.
Foreign markets are booming
In overseas markets, spot gold was trading marginally higher at USD 4,047.71 an ounce, while silver rose nearly 3 percent to USD 52.86 an ounce. Spot gold was trying to stabilize around $4,051 an ounce after a heavy sell-off in the previous session, said Praveen Singh, head of commodities at Mir Asset Sharekhan. Geopolitical developments were also discussed. Hopes for a US-Iran peace deal have risen after President Donald Trump said the ongoing war between Washington, Tel Aviv and Tehran was almost over.
Gold can get cheap
Iran continues to make its demands. This included restoring its fixed assets, lifting the naval blockade, lifting sanctions and ending hostilities on all fronts. Singh said crude oil prices, which have fallen nearly 25 percent in the past 10 days, could remain volatile if there is no concrete progress in peace talks. He further said that gold is likely to remain in a downward trend in the near future and scope for upside is limited.
