Gold plunges five-week low of Rs 1.54 lakh/10g

Gold prices fell by Rs 1,000 to more than a month’s low of Rs 1,54,400 per 10 grams in the national capital on Tuesday amid weak global trends and a strong US dollar.

The precious metal previously traded around these levels on August 7, when it stood at Rs 1.54 lakh per 10 grams in the local market.

Silver prices, however, remained unchanged for the second consecutive day at Rs 2,34,600 per kilogram (inclusive of all taxes), according to local traders.

“Gold edged lower on Tuesday amid weak global cues, with spot gold slipping below $4,300 an ounce and trading near a one-month low,” said Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities.

The decline was driven by a stronger US dollar and rising Treasury yields as elevated crude oil prices heightened inflation concerns and reinforced expectations of a Fed rate hike at this week’s policy meeting, Gandhi added.

According to Vedika Narvekar, Research Analyst- Commodities & Currencies, Anand Rathi Share and Stock Brokers Ltd, gold in the domestic market is trading at a five-week low and has dropped more than 3 per cent this month.

Two big triggers driving the fall are crude oil and Treasury yields, she said.

Saudi Arabia’s shutdown of its East-West pipeline following attacks has put millions of barrels a day of supply at risk, pushing crude prices higher at a time when global supplies are already stretched.

The rise in oil rates is also stoking inflation fears, with market participants now pricing in a 92 per cent chance of a Federal Reserve rate hike this week, the first since July 2023, Narvekar said.

“With the Fed decision on Wednesday, expect gold to stay under pressure,” she added.

In overseas markets, spot gold fell $22.28, or 0.52 per cent, to $4,276.52 per ounce, while silver slipped marginally to $63.07 an ounce.