On Friday, November 13, bullion market in Delhi witnessed softening of prices of precious metals for investors and buyers. A decline of Rs 2,500 was recorded in the price of gold within a day and its new level was Rs 1,40,900 per 10 grams. Earlier on Thursday, gold had closed in the market at Rs 1,43,400 per 10 grams. In this way, the price of gold has been going down for four consecutive trading sessions. Similar weakness was seen in the silver market also. After a decrease of Rs 3,500 per kg in a day, its price remained at Rs 1,84,000. In the last trading session, silver was at Rs 1,87,500 per kg. According to market experts, weak trends at the international level, strength of the US dollar and slowdown in domestic purchasing after festivals have put pressure on the prices of these metals.
Latest prices of both metals in Delhi market
According to data from All India Bullion Association, the price of gold decreased by Rs 2,500 on Friday. With this the price came down to Rs 1,40,900 per 10 grams. These rates include all applicable taxes.
A decline was also recorded in silver trading. There was no significant change in the price on Thursday, but on Friday the price came down by Rs 3,500. Now to buy one kilogram of silver, one will have to spend Rs 1,84,000.
Customer purchases slowed down after Diwali
According to Saumil Gandhi, Senior Analyst, Commodity Affairs, HDFC Securities, two major factors are affecting gold prices in the domestic market. The first reason is the weak condition of the metal in the international market and the second is the decline in demand from retail customers after the end of the festival season.
There was a surge in purchasing of jewelery and gold during Diwali. After the festival, the activity of customers in the market was not the same as before. The effect of this decrease in demand is visible on the prices.
Pressure on silver due to dollar's strength
Vikram Subburaj, Chief Executive Officer, Geotus.com, said that due to increase in the yield on US Treasury bonds and strengthening of the dollar, the conditions have become challenging for metals like gold and silver.
According to him, the relatively sharp decline in silver indicates that the price of this metal is also affected by the risk taking propensity of investors and expectations of demand related to industrial use.
Gold registered a partial comeback in the foreign market
There was a sharp weakness in gold prices in the international market on Thursday. After this, some improvement was seen on Friday. Spot gold price increased by $ 27.21, or about one percent, to $ 3,904.87 an ounce.
Earlier in the trading session, gold had fallen by almost three percent and closed at $ 3,877.52 an ounce. During the fall its price had gone below the important level of $4,000. According to Saumil Gandhi, on Thursday, gold had also touched a new low of the last 52 weeks.
Market keeps an eye on events in America and West Asia
Selling in the market was said to increase after US President Donald Trump's statement in which he denied the need for a peace deal with Tehran. This weakened the hopes of an early diplomatic solution between America and Iran.
Now the focus of investors is on the US Producer Price Index and Core PPI data. These may provide indications about the direction of inflation and the next interest rate policy of the Federal Reserve. According to Jatin Trivedi, analyst at LKP Securities, gold prices may remain volatile in the coming days due to fluctuations in the dollar. Tension in West Asia and crude oil prices may also influence the market direction.