Mumbai: Spot gold prices slipped below the $4,000 per ounce after a significant increase this year, dipping 2.7 per cent from last week to $3,984.43 an ounce, data showed on Monday. The price of 10 grams of 24-carat gold was Rs 1,21,113 during the day trade, according to data published by the India Bullion and Jewellers Association (IBJA).
Analysts said the moderation in demand came as trade tensions between the US and China cooled and the dollar index jumped to its highest in three months. After a sharp rally, gold and silver lost some shine last week. Further Beijing's decision to end a long-standing tax rebate for certain retailers is expected to weaken demand in one of the world's largest bullion markets, according to multiple media reports.
In spite of the pullback, gold remains over 50 per cent higher year-to-date, driven by central-bank purchases and safe-haven demand. Silver prices have also corrected sharply after hitting festive-season highs of around Rs 2 lakh per kilo during the Dhanteras period. The price of one kilogram of silver was Rs 1,49,660, according to data published by the India Bullion and Jewellers Association (IBJA).
However, many experts view this as a temporary phase, with another rally likely in the near future. "Rising US bond yields above 4 per cent further weakened investor appetite for safe-haven assets. Fed Chair Jerome Powell’s comments that rate cuts in December aren’t guaranteed also dampened sentiment.
However, consistent central bank purchases and lingering global economic uncertainties continue to offer underlying support to bullion prices," according to Rahul Kalantri, VP Commodities, Mehta Equities Ltd. Analysts said that gold has support at Rs 1,20,870 to Rs 1,20,480 while resistance is at the Rs 1,21,890 to Rs 1,22,300 zone. Silver has support at Rs 1,47,450 to 1,46,750 while resistance is at Rs 1,49,340 to 1,50,280 zone.
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