Gold prices declined on Monday, October 12, with the price of 24-karat gold falling to ₹1,50,720 per 10 grams, compared with ₹1,51,480 per 10 grams on Sunday, October 11.
The price fell by ₹760 per 10 grams, marking a decline of around 0.5% from the previous day. The movement comes as the rupee strengthened against the US dollar after the Reserve Bank of India announced a series of measures to reduce volatility in the foreign exchange market.
The fall comes after the rupee rebounded strongly in early trade on Monday. The Indian currency opened at 95.61 against the US dollar and later traded at 95.80, gaining 91 paise from its previous close.
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Gold price today - city wise
Gold prices varied across major Indian cities on Monday.
{{/usCountry}}Gold prices varied across major Indian cities on Monday.
{{/usCountry}}Delhi: 24k ₹1,50,601; 22k ₹137816.78
Mumbai: 24k ₹1,50,847.70; 22k ₹137926.17
Chennai: 24k ₹1,52,008.88; 22k ₹139056.21
Kolkata: 24k ₹1,51,865.28; 22k ₹138919.31
Hyderabad: 24k ₹1,50,930.26; 22k ₹138092.41
Bengaluru: 24k ₹1,50,629; 22k ₹137788.38
Among the cities, Chennai recorded the highest gold price at ₹1,52,008.88 per 10 grams.
Meanwhile Delhi recorded the lowest rate at ₹1,50,601 per 10 grams, followed by Bengaluru at ₹1,50,629.
The difference between the highest and lowest prices was about ₹1,407.88 per 10 grams.
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Why is gold price going down?
The fall in gold prices comes alongside the recovery of rupee. A stronger rupee can ease the pressure on the domestic price of gold, particularly when the dollar remains an important factor in the market.
The rupee had been under pressure and closed at 96.71 against the US dollar on Friday. It had also recently touched a record low level. However, the RBI announced several measures aimed at reducing speculative positions and lowering dollar demand in the spot market.
The central bank announced a dedicated dollar window for three state-run oil marketing companies and tightened rules governing foreign exchange derivatives. It also reduced the threshold for certain derivative transactions without an underlying exposure from $100 million to $5 million.
Also read: RBI Tightens Monetary Policy With 25 BPS Rate Hike | HT India
RBI measures support rupee recovery
The RBI also introduced a Foreign Exchange Risk Reserve, requiring authorised dealers to maintain a cash reserve with the central bank for certain qualifying derivative contracts.
The stronger rupee is therefore an important factor behind Monday's movement in domestic gold prices.
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West Asia crisis and gold prices
The broader West Asia crisis also remains an important backdrop for financial markets. At the same time, Brent crude was trading at $103.11 per barrel, despite falling 1.54% in futures trade.
The movement in gold therefore viewed alongside currency movements, crude oil prices and broader uncertainty in the market.
The gold rate on Monday shows a one-day decline of ₹760 per 10 grams, while the rupee's recovery and the RBI's latest measures have provided near-term support to the currency.(With inputs from PTI)