Gold prices in the national capital fell sharply on Thursday, declining by Rs 2,800 to settle at Rs 1,24,500 per 10 grams, according to the All India Sarafa Association. The drop was in line with weak global cues, as spot gold slipped by $21.15, or 0.53 per cent, to $3,978.06 per ounce in international markets.
Silver also sees steep decline
Silver prices also witnessed a significant fall, dropping Rs 5,000 to Rs 1,52,000 per kilogram in Delhi. In global markets, silver declined 0.56 per cent to $57.10 per ounce.
Market analysts attributed the decline to a strengthening US dollar and profit-booking by investors after recent gains. The dollar index edged higher, making dollar-priced precious metals more expensive for holders of other currencies, thereby reducing demand.
Impact on other precious metals
Other precious metals also traded lower. Platinum fell by $5.20 to $1,045.60 per ounce, while palladium declined $8.40 to $1,218.90 per ounce in the international markets.
In the domestic futures market, gold contracts for August delivery on the Multi Commodity Exchange (MCX) were trading lower by Rs 453, or 0.37 per cent, at Rs 1,23,750 per 10 grams. Silver futures for July delivery declined Rs 1,020, or 0.67 per cent, to Rs 1,51,800 per kg.
Outlook for gold and silver
According to analysts, the near-term outlook for gold remains cautious due to expectations of further interest rate hikes by central banks globally. Higher interest rates increase the opportunity cost of holding non-yielding assets like gold.
However, some experts believe that geopolitical tensions and inflationary pressures could support prices at lower levels. The market is now awaiting key US economic data, including the personal consumption expenditures (PCE) price index, for further direction.
In the previous session, gold had closed at Rs 1,27,300 per 10 grams, while silver ended at Rs 1,57,000 per kg in Delhi.
