On Monday, gold prices in the national capital Delhi witnessed a major setback due to the strengthening of the rupee and sluggish trading in the international markets. Gold prices registered a sharp decline of Rs 900, after which it fell to Rs 1.47 lakh per 10 grams. According to information received from the All India Sarafa Association, the price of 99.9 percent pure gold has decreased by Rs 900 to Rs 1,47,400 per 10 grams (including all taxes). Let us tell you that in the previous trading session, gold had closed at Rs 1,48,300 per 10 grams. Saumil Gandhi, Commodities Senior Analyst at HDFC Securities, says that due to sluggish trading in the international market and strengthening of the Indian rupee, gold prices remained within a limited range on Monday. However, silver has regained its luster, jumping ₹1,800 from Friday’s ₹224,700 per kg to ₹226,500 per kg (including all taxes).
Silver Prices Rise in International Markets
Gaurav Garg, Research Head at Lemon Markets Desk, commented that silver prices saw a significant increase in Monday’s trading session. This was primarily due to a weak US dollar and softening crude oil prices, which reinvigorated investor confidence in precious metals and led to increased buying. Analysts also note that investors are currently showing little interest in purchasing gold. Furthermore, investors are adopting a cautious stance ahead of important US economic data, which has prevented a significant rise in gold prices. In international markets, spot gold prices rose marginally to $4,048.89 per ounce, while global silver prices also rose slightly to around $57.97 per ounce.
Effect of easing geopolitical tensions and softening oil prices
Kainat Chenwala, Head of Commodity Research at Kotak Securities, shed light on the situation, stating that precious metals remained overall strong on Monday. Spot prices rose marginally to around $4,050 per ounce, and silver traded near $58. He explained that this was significantly supported by the softening of crude oil prices, primarily due to the easing of geopolitical tensions after Trump canceled new attacks against Iran.
Impact of dollar weakness and yen fluctuations on the market
Kainat Chenwala further explained that the weakening of the US dollar also provided another major support to precious metals. This entire development included Japan’s intervention to support its yen, including the first joint yen-buying operation between the US and Japan since 1998. The dollar index slipped due to the yen’s heavy weight in the currency basket. However, experts believe that US real yields remain elevated, and the yen’s movement is primarily due to technical reasons rather than any real change in the dollar’s underlying fundamentals. This is why gold hasn’t seen the strong rally expected given the dollar’s decline.
Investors Eye Key Economic Data
Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, explained that despite a sharp decline of more than 5 percent in crude oil prices, gold’s movement has remained largely subdued and calm. This is largely due to the fact that investors and the market are focused on several crucial economic data this week. These important data coming this week include big figures like ISM Manufacturing, JOLTs Job Openings, ISM Services, ADP Employment Change and Non-Farm Payroll data, the impact of which will decide the movement of gold and silver in the coming days.