Gold and silver prices declined in the national capital on Wednesday as appreciation in the rupee, elevated crude oil prices and weak global trends dampened the sentiment of investors. The yellow metal of 99.9 per cent purity dropped `1,300 to `1,49,000 per 10 grams (inclusive of all taxes), according to the All India Sarafa Association. Gold had closed at `1,50,300 per 10 grams in the previous session. Silver entered into a sliding path after remaining steady for two consecutive sessions, falling `1,600 to `2,13,400 per kilogram. The white metal had settled at `2,15,000 per kg on Monday.
“Gold traded weak on Wednesday, as rupee appreciation continued to add pressure on domestic prices,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities. The overall trend remains weak amid a stronger rupee and concerns over elevated crude oil prices feeding inflationary pressures, he added.
The rupee surged 48 paise to close at 94.43 (provisional) against the US dollar on Wednesday, supported by the RBI’s intervention to contain dollar demand. Ashish Rajodiya, Head of Commodities, PL Capital, said silver also traded lower in the domestic market. Early hopes of an Iran peace deal pulled oil prices down and briefly supported precious metals. However, those gains faded as crude recovered amid reports that Iran said there was little reason to expect diplomatic progress with the United States.
In global markets, spot gold was traded flat at $4,127.68 per ounce, while silver fell 0.48 per cent to $57.72 per ounce. “Spot gold is trading flat near $4,126 per ounce, while silver retreated to $57.10 per ounce after touching $58.60 in the previous session,” said Kaynat Chainwala, AVP Commodity Research at brokerage platform Kotak Neo. Elevated oil prices continue to complicate the monetary policy outlook, although weakness in the US dollar and Treasury yields has limited the downside in precious metals, she added.