Gold Declines Rs 1,670 To Rs 1,31,530 Amid Weak Global Cues

Gold prices plunged Rs 1,670 to Rs 1,31,530 per 10 grams in the national capital on Tuesday, amid weak trends in the international markets, according to the All India Sarafa Association. The precious metal of 99.9% purity had settled at Rs 1,33,200 per 10 grams in the previous market session.

Gold edged lower on Tuesday as traders booked profits after prices hit a multi-week high in the previous session, while a cautious approach adopted by traders before the important US macro data due later this week also contributed to the decline,' Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

However, silver extended its rally for the sixth straight session and soared Rs 4,360 to Rs 1,81,360 per kilogram (inclusive of all taxes). It had closed at Rs 1,77,000 per kilogram on Monday, as per the association.

Praveen Singh, Head of Commodities, Mirae Asset ShareKhan, said that domestic bullion prices are drawing support from an extremely weak Indian rupee that has slumped to a record low of 89.95 against the US dollar on trade deal uncertainty.

On the global front, spot gold fell by $45.17, or 1.07%, to $4,187 per ounce, while silver was trading 1.77% lower at $56.97 per ounce.

'Gold eased to around $4,200 on profit-taking, while silver declined nearly 2% to $57 as investors took a breather after the metal's accelerated six-day advance and awaited key US data releases later in the week,' Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

She noted that the latest US economic data added to the cautious tone, with the Institute for Supply Management reporting that manufacturing contracted for a ninth consecutive month, adding pressure on the Fed to ease policy.

Renisha Chainani, Head – Research at Augmont, said the anticipation that the incoming US Fed Chair may take a more dovish stance is helping to cap the downside for both gold and silver.

On Monday, the white metal had jumped to a record high of $58.83 per ounce in overseas trade as investor demand tightened against low physical supply.

On the market outlook, Chainani said silver historically delivers strong returns in December, citing gains of nearly 17% in 1997 as well as 2020.

'This seasonal tailwind may intensify the current price trend for December with targets of $60 (Rs 1,80,000 per kg) and $62 (Rs 1,86,000 per kg), assuming tight supply conditions persist,' she added. PTI HG HVA