1 day ago
Gold Falls Fifth Day as Global Sell-Off Hits Delhi
Gold became cheaper in Delhi for the fifth day in a row.
Its price fell by Rs 2,700 to Rs 1,58,200 for 10 grams.
Over five trading sessions, it fell by Rs 8,900.
Silver also became cheaper by Rs 5,000 per kilogram.
Gold prices in international markets dropped sharply too.
Tensions between the United States and Iran pushed oil prices higher and raised worries about inflation.
Investors are also watching whether the US central bank might increase interest rates.
Prime Minister Narendra Modi’s comments could reduce some jewellery demand in India, although analysts said they would not greatly affect global gold prices.
Delhi gold of 99.9% purity fell Rs 2,700 to Rs 1,58,200 per 10 grams on Tuesday.
The five-session decline reached Rs 8,900, or 5.3%, from the August 25 price of Rs 1,67,100.
Silver dropped Rs 5,000 to Rs 2,40,500 per kilogram, including taxes.
Spot gold fell 2% to USD 4,368.58 per ounce, while global silver declined nearly 3%.
Analysts linked bullion pressure to US-Iran tensions, inflation concerns, rate-hike expectations and weaker domestic sentiment.
- Who
- Gold and silver traders, investors, analysts, the US Federal Reserve and Prime Minister Narendra Modi were involved in the developments.
- What
- Gold fell Rs 2,700 to Rs 1,58,200 per 10 grams in Delhi, extending its decline to five consecutive sessions.
- Where
- Domestic prices were reported in New Delhi, while the broader bullion sell-off occurred in overseas markets.
- When
- Tuesday, September 1; the five-session decline began from the August 25 price.
- Why
- Renewed US-Iran tensions pushed oil prices higher and increased inflation concerns, while expectations of US interest-rate increases pressured bullion prices.
Global-market explanation
Domestic-sentiment explanation
Main cause of the decline
Global-market explanation
Praveen Singh of Mirae Asset ShareKhan attributed pressure on gold to Federal Reserve Chair Kevin Warsh’s hawkish speech and the increased possibility of US interest-rate hikes.
Domestic-sentiment explanation
Vedika Narvekar of Anand Rathi said renewed US-Iran tensions and higher oil prices were increasing inflation concerns and making the interest-rate outlook more important for bullion.
Effect of Modi’s comments
Global-market explanation
Narendra Modi’s call to avoid unnecessary gold purchases was unlikely to be a major driver of international gold prices.
Domestic-sentiment explanation
The comments could weigh on domestic sentiment and near-term expectations for jewellery demand in India.
Key facts
- Delhi gold price
- Rs 1,58,200 per 10 grams for 99.9% purity, including taxes
- Daily gold decline
- Rs 2,700 from Monday’s closing price of Rs 1,60,900
- Five-session gold decline
- Rs 8,900, or 5.3%, from Rs 1,67,100 on August 25
- Delhi silver price
- Rs 2,40,500 per kilogram, down Rs 5,000
- Global spot gold
- Down USD 80.61, or 2%, to USD 4,368.58 per ounce
- Global spot silver
- Down nearly 3% to USD 64.68 per ounce
- Expected US rate hike
- Markets were pricing in a 60% probability of a rate increase at the September 16 FOMC meeting
Quotes
Praveen Singh
Head of Commodities at Mirae Asset Sharekhan
“Spot gold traded 2 per cent lower to hover around USD 4,370 per ounce in global markets as the Federal Reserve Chair Kevin Warsh’s hawkish speech at the Jackson Hole Symposium last week continues to keep the possibility of interest rate hikes elevated”
theprint.in
Sources
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