Gold falls Rs 400 to Rs 1,52,600 and silver Rs 500 to Rs 2,26,000 as rupee gains for third session
Gold and silver fell for a second straight day in the bullion market on Tuesday as the rupee closed 40 paise higher at 95.38 against the dollar.
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There was relief for ordinary buyers in the bullion market as gold and silver prices fell for the second day in a row, helped by the rupee's continued strength.
According to the latest data from the All India Bullion Association, gold of 99.9 per cent purity fell by Rs 400 on Tuesday to Rs 1,52,600 per 10 grams (inclusive of all taxes). On Monday, at market close, gold stood at Rs 1,53,000 per 10 grams.
Silver also weakened. It fell by Rs 500 to Rs 2,26,000 per kg (inclusive of taxes). On Monday, silver had closed at Rs 2,26,500.
The strengthening of the Indian rupee is seen as the main reason for the fall in domestic gold and silver prices. On Tuesday, the rupee recovered well for the third straight trading session, jumping 40 paise against the US dollar to close at 95.38.
According to the IBJA, the morning gold rates were: 24-carat gold at Rs 147617 per 10 grams, 22-carat at Rs 135217 per 10 grams, 18-carat at Rs 110713 per 10 grams and 14-carat at Rs 86356 per 10 grams. Silver was at Rs 219038 per kg.
Among cities, 24-carat gold was at Rs 149290 per 10 grams in Mumbai, Pune, Nashik, Nagpur, Kolhapur, Jalgaon, Sangli and Chhatrapati Sambhajinagar.
Saumil Gandhi, commodity analyst at HDFC Securities, said weak signals from global markets kept domestic gold prices soft on Monday. The rupee's strength also added some pressure on precious metals. He said demand for physical gold was mixed. Buying in the domestic market has slowed somewhat after the rise in prices, while demand is expected to pick up again after a period of thin trading owing to holidays in China.
According to Gaurav Garg, head of research at the brokerage platform Lemon, gold in the global market was trading down at around $4,179 an ounce even after crude oil prices eased. The US dollar index remains near an 18-month high, so the scope for any further sharp rise in precious metals has become limited for now.
Crude oil prices have fallen on hopes of higher energy supplies from Russia, easing concerns over immediate supply. However, renewed tension in West Asia and risks to sea routes continue to keep oil prices volatile.
The Reserve Bank of India (RBI) had also taken some important steps at the end of last week to strengthen the domestic currency. After these measures, the rupee closed on Monday 96 paise higher at 95.75 to the dollar, its biggest one-day gain in more than six months.
