Mumbai: Gold prices extended their decline for a sixth consecutive session on Wednesday, sliding Rs 2,100 to a three-week low in Delhi as inflation worries and expectations of tighter US monetary policy weighed on precious metals.
The 99.9 percent purity metal fell to Rs 1,56,100 per 10 grams, inclusive of taxes, from Tuesday’s close of Rs 1,58,200. Gold has now surrendered Rs 11,000 since touching Rs 1,67,100 on August 25. It was last near the current level on August 14, at Rs 1,56,200.
Domestic Bullion Market Weakens
Saumil Gandhi, Senior Commodities Analyst at HDFC Securities, said precious metals remained under intense selling pressure, with international spot gold touching its lowest level in more than three weeks before recovering.
Silver declined for the second straight session, plunging Rs 5,000 to a two-week low of Rs 2,35,500 per kilogram, including taxes. The metal had closed at Rs 2,40,500 per kilogram on Tuesday, according to local traders.
Aamir Makda of Choice Broking said escalating conflict in West Asia had driven crude oil higher, reviving inflation and interest-rate concerns and adding pressure on silver prices.
Fed Concerns Dominate Global Trade
In overseas markets, spot gold subsequently rebounded by USD 25.24, or 0.58 percent, to USD 4,303.12 an ounce. Silver, however, dropped nearly 1 percent to USD 63.64 an ounce.
Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said gold continued to struggle with fears that the US Federal Reserve could raise interest rates. Surging oil prices and hawkish remarks from Federal Reserve Chair Kevin Warsh reinforced those concerns. Warsh has advocated action if elevated inflation fails to moderate quickly.
Global gold-backed exchange-traded funds recorded net outflows after seven successive sessions of inflows, signalling renewed caution among investors.
Crude prices surged following fresh military exchanges between the US and Iran, intensifying inflation risks. Vedika Narvekar of Anand Rathi Share and Stock Brokers said markets were awaiting US labour data for clearer signals on the Federal Reserve’s next policy decision. The data are likely to shape near-term bullion market direction decisively.
