New Delhi: Gold prices Tuesday extended their decline to the second day amid muted demand from local jewellers and a jump in rupee’s value against the US dollar. Gold rates today slipped by Rs 100 to Rs 32,000 per 10 grams. Steady global prices capped the fall in domestic gold rates, traders said. Tracking gold, silver rates today fell by Rs 200 to Rs 37,900 per kg, hurt by lower offtake by industrial units and coin makers. Prices of gold of 99.9% and 99.5% purity fell by Rs 100 each to Rs 32,000 and Rs 31,850 per 10 gram, respectively.
Gold prices had declined Rs 50 on Monday. Meanwhile, the rupee today hit a two-month high of 71.28 against the US dollar, rallying for the sixth day. A higher rupee reduces the imported cost of gold.
Sovereign gold prices however remained unchanged at Rs 24,800 per piece of eight gram. Silver ready continued its weakness and fell by another Rs 200 to Rs 37,900 per kg and weekly-based delivery by Rs 251 to Rs 36,769 per kg.
Silver coins, however, maintained a steady trend at Rs 73,000 for buying and Rs 74,000 for selling of 100 pieces.
In global markets, gold prices were steady today, holding above the $1,220 level as the dollar was pressured by weak US economic data and a clouded interest rate outlook. Spot gold was little changed at $1,224.45 per ounce. US gold futures were flat at $1,224.8 per ounce.
The dollar index, which measures the greenback against a basket of six major currencies, traded near an over one-week low that it hit in the previous session.
The US dollar came under pressure as US Federal Reserve officials cautioned on the global growth outlook and weak data at home, pointing to a potentially slower pace of rate hikes. The Fed is still expected to raise interest rates again next month and three times next year, but a strong majority of economists polled by Reuters over the past week say the risk is it will slow that pace down.
Higher US interest rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding bullion.
Traders at MKS PAMP expect gold prices to be supported by its safe-haven appeal. “Trade tensions remain heightened between the U.S. and China, global equities are under pressure, while Brexit negotiations continue to create uncertainty across markets, keeping gold’s safe-haven status intact,” they said in a note.