Gold price drops to ₹44,760 per 10 gram, silver down too
Gold prices on Tuesday tumbled ₹679 to ₹44,760 per 10 gram in Delhi over bleak international market trend and rupee appreciation. The yellow metal had closed at ₹45,439 per 10 grams in the previous session. Silver also crashed by ₹1,847 to ₹67,073 per kg from the closing of ₹68,920 per kg in the previous day trade.
"Spot prices for 24 karat gold at Delhi plunged by ₹679 with fall in global gold prices and rupee appreciation,” Tapan Patel, HDFC Securities’ senior analyst (commodities), said, according to news agency PTI.
Gold prices have fallen nearly ₹11,000 since August 2020 when the precious metal breached the all-time rate at ₹57,008 per 10 gram.
The spot rupee was trading around 14 paise stronger against the US dollar during the day, he added. In the international market, gold was trading lower at $1,719 an ounce and silver was down at $26.08 an ounce.
Globally, gold prices edged up on Tuesday, having earlier slid to its lowest in 8-1/2 months, as US Treasury yields eased and offset pressure from a stronger dollar. Spot gold was up 0.3% at $1,728.09 per ounce by 1324 GMT, after falling to $1,706.70, its lowest since June 15. US gold futures rose 0.6% to $1,733.30 per ounce.
"We have a bit of a pause in the (rally) in U.S. yields now," ABN Amro analyst Georgette Boele was quoted as saying by Reuters. Boele also said there is some nervousness in the market as investors were aggressively long in gold and bought it at higher prices, betting that prices would revisit the highs around $2,000, which hasn't happened yet.
Benchmark US Treasury yields have eased off a one-year high hit last week, while the dollar index held near a four-week peak. "The strength of the greenback is increasing the bearish pressure on gold," ActivTrades chief analyst Carlo Alberto De Casa said in a note.
While gold is considered a shield against inflation, higher yields had threatened that status as they increase the opportunity cost of holding bullion. "Diversification out of fixed income into gold can continue, especially if the focus around inflation overshoot risks increases," Goldman Sachs Commodities Research said in a note on Monday, according to Reuters.
Investors are also keeping an eye on the developments of the $1.9 trillion stimulus bill that will be debated in the US Senate this week. According to Reuters, Citi analysts lowered their 2021 gold price forecast to $1,800 per ounce and said that "spot bullion holding support at $1,750-$1,765 appears critical to avoid a sharper sell-off amid higher US yields."
On Monday, gold prices rose by ₹241 to ₹45,520 per 10 gram in the national capital in line with the strong global bullion market trend, according to HDFC Securities. The precious metal had closed at ₹45,279 per 10 grams in the previous trading session. Silver also jumped by ₹781 to ₹68,877 per kg, compared with the previous close of 68,096 per kg.