Gold ends week at a high, still ₹10,000 cheaper than last year
Gold began the week with edging lower at the Multi Commodity Exchange (MCX) on Monday when the yellow metal traded at ₹45,355 per 10 gram and silver traded at ₹65,070 per kg.
The next day was again low for the bullion that used to trade at ₹56,200 in August last year. This week also witnessed more than ₹11,000 drop in the gold prices from last year’s highs. On Tuesday, gold futures in June was at ₹45,503 per 10 gram. Silver was at ₹64,943 per kg.
The yellow metal was marginally high on Wednesday as it traded at ₹45,798 per 10 gram. It was on Thursday that the precious metal traded above ₹45,000 as it reached ₹46,320 per 10 gram. The trend continued on Friday as it traded at ₹46,793 per 10 gram, the highest in the week.
The gains in gold prices stalled the physical demand for gold in India as customers witnessed an uptick in the local gold futures this week.
“This week gold prices rose in the international market and rupee also fell. That led to a big jump in local prices, which consumers are struggling to digest," Reuters quoted director at Mumbai bullion dealer RiddiSiddhi Bullions Mukesh Kothari as saying.
The gains to over ₹46,000 this week came after the local gold futures dropped to ₹43,320 per 10 gram, reported Reuters.
In the international market, gold slipped more than one per cent on Friday, pulled down by the gains in the US Treasure yields and a rebound in the dollar. The precious metal was still on course to record its first weekly gains in three weeks.
"While overall, gold market is bullish short-term, with expectations of a break higher through $1,760-65, caution about fresh 10 and 30-year (Treasury) auctions and the CPI report next week are keeping yields supported, keeping gold's advance in check," Reuters quoted Tai Wong, head of base and precious metals derivatives trading at BMO as saying.
The US Treasury yields and the US dollar rebounded from their one-week lows and increased the opportunity cost of holding the asset.
The mini recovery in gold is based on the market predictions of slower economic recovery in the backdrop of rising Covid-19 cases, reported Reuters.