Gold prices declined by Rs 500 to Rs 1,46,400 per 10 grams in the bullion market following Diwali, while silver prices remained unchanged. Weakness in global markets and a ber US dollar have added pressure on precious metal prices.
Gold prices witnessed a decline in Delhi's bullion market on Tuesday, November 10, as the festive season came to an end. The price of 99.9% pure gold fell by Rs 500 to Rs 1,46,400 per 10 grams, compared with Rs 1,46,900 per 10 grams at Monday's closing level.
Silver prices, however, remained unchanged despite the decline in gold rates. According to local bullion traders, silver continued to trade at Rs 1,92,500 per kilogram for the second consecutive trading session. The quoted price includes all taxes.
Gold and silver purchases generally increase around Diwali and Dhanteras, with consumers buying jewellery, coins and gold for investment purposes. However, festive purchases this year did not meet market expectations, limiting the support from domestic demand.
International market trends, movements in the US dollar and the rupee's exchange rate play an important role in determining domestic gold prices.
On Tuesday, spot gold prices in the international market declined by $27.59, or approximately 1%, to $4,113.55 per ounce. International silver prices also fell by more than 1% to $52.77 per ounce.
A ber US dollar can make dollar-denominated gold more expensive for buyers using other currencies. This can weigh on demand and put pressure on gold prices.
The weakness in international bullion markets was reflected in domestic gold prices in India. However, despite the decline in international silver prices, silver rates remained unchanged in Delhi's local bullion market.
Crude oil prices have also been influencing developments in the gold market. According to Akshat Siddhant, Head Quant Analyst at Mudrex, the decline in crude oil prices ahead of the release of US inflation data has eased some concerns surrounding inflation.
On Tuesday, Brent crude prices fell by $2.72, or approximately 3%, during trading to reach $89.85 per barrel in the international market.
The easing of tensions between the United States and Iran, along with expectations of an end to the conflict, is considered one of the key reasons behind the decline in crude oil prices.
Lower crude oil prices can ease inflationary pressure and influence investor expectations regarding US interest rates. However, the decline in oil prices does not necessarily mean that gold prices will continue to fall.
