The decline in Indian gold rates was extended to a second day. Prices remained muted due to the fall in demand from jewelers, and a growing rupee heralding investor towards it.
Gold rates for Tuesday fell by some Rs. 100 to reach the cumulative price of Rs. 32,000 per 10 grams for the day. Traders, however, believe that the tight ranged decrease has been seen because of steady prices in the gold market today.
Tracking the loss in price of gold, silver rates also fell by some Rs. 200 to reach the cumulative price of Rs. 37,900 per kg. The metal is believed to be affected by lower off take from industrial units and coin makers across the country.
The prices for gold of 99.9 percent and 99.5 percent purity also fell by Rs. 100 as these prices reached Rs. 32,000 and Rs. 31,850 per 10 grams respectively.
This is the second consecutive day of losses for gold prices in India, as the prices had declined by Rs. 50 earlier on Monday. In news from the forex market, the rupee fared well against the dollar today, as it hit a two-month high of 71.28 rupees per US dollar. This rally is also believed to have an effect on gold prices, as a stronger rupee reduces the import price of gold in the market.
Sovereign gold in India remained unchanged during trading today, as the prices for an eight-gram sovereign piece were steady at Rs 24,800 per 8 gram piece.
The decrease in Silver rates is believed to be directly related to lower off take from industrial units and coin manufacturers. The price for weekly-based delivery of silver fell by some Rs 251 to reach Rs 36,769 per kg.
Silver coins have, however, maintained a steady flow, with prices being marked at Rs. 73,000 per buying of 100 coins and Rs. 74,000 for the selling of 100 coins.
Gold prices in the global markets maintained a muted range today as they remained above the $1,820 level. The dollar was pressured by some weak economic data and fell in regards to other currencies, leading investors towards safer investments, like gold. Spot gold prices remained unchanged at $1,824.45 while prices for United States gold future remained flat at $1,824.8 per ounce respectively.
The index for the U.S dollar traded at a one-week low as the currency hit a bare low during the session. The US dollar has come under immense pressure, with the US Federal Reserve cautioning towards weak data at home, and signaling a slower rate to the proposed rate hikes. Expectations are that the Fed will further raise interest rates come next month, after having dictated three increases during this year. Analysts have also predicted that there will be 3 more increases next year. However, economists polled by the Reuters have undermined this possibility, suggesting that the chances for such increases are low.