New Delhi, Sep 1 (PTI) Gold prices fell for the fifth consecutive day on Tuesday to trade at Rs 1.58 lakh per 10 grams in the national capital, down by Rs 2,700, amid a global sell-off.
Gold of 99.9 per cent purity depreciated by Rs 2,700 to a nearly two-week low of Rs 1,58,200 per 10 grams (inclusive of all taxes) from Monday’s closing level of Rs 1,60,900 per 10 grams, according to local traders. The precious metal had traded at this level on August 19, when it was quoted at Rs 1,58,000 per 10 grams.
In the past five sessions, gold has plunged by Rs 8,900, or 5.3 per cent, from Rs 1,67,100 per 10 grams recorded on August 25.
Silver also declined by Rs 5,000 to Rs 2,40,500 per kg (inclusive of all taxes). The white metal had ended flat at Rs 2,45,500 per kg on Monday.
The pressure on bullion came as a fresh escalation between the US and Iran pushed oil prices higher, stoking inflation concerns and sharpening the focus on the interest-rate outlook.
Domestic gold prices are under reeling pressure amid the latest US-Iran escalation and the resulting jump in oil rates which are also adding to inflation concerns, making the outlook even more important for the yellow metal, Vedika Narvekar, Research Analyst – Commodities & Currencies, Anand Rathi Share and Stock Brokers Ltd, said.
Adding a domestic sentiment dimension to the market, Prime Minister Narendra Modi urged people to avoid buying gold unless necessary. In an Instagram video from Kyrgyzstan, Modi called for greater emphasis on Swadeshi and self-reliance, asking people to avoid foreign holidays, weddings abroad and unnecessary gold purchases.
Narvekar said the Prime Minister’s comments were unlikely to be a major driver of international gold prices but could weigh on domestic sentiment and jewellery demand expectations in the near-term.
In the overseas markets, the sell-off in the bullion was more pronounced, with spot gold dropping USD 80.61, or 2 per cent, to USD 4,368.58 per ounce, while silver fell nearly 3 per cent to USD 64.68 per ounce.
“Spot gold traded 2 per cent lower to hover around USD 4,370 per ounce in global markets as the Federal Reserve Chair Kevin Warsh’s hawkish speech at the Jackson Hole Symposium last week continues to keep the possibility of interest rate hikes elevated,” Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said.
Market participants are pricing in a 60 per cent probability of a rate hike by the American central bank at the September 16 FOMC meeting, he added.
Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said investors will turn their focus to a busy US economic calendar, with manufacturing and services activity data scheduled for release on Tuesday and Wednesday, followed by the closely watched August non-farm payrolls report on Friday. PTI HG HG MR
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