There was a strong comeback in the prices of precious metals in the bullion market of the national capital on Monday. In view of the upcoming wedding season, there has been a huge jump of about 3 percent in the prices of gold and silver in the domestic market due to the latest purchases made by jewelers and the record fall of the rupee.
Latest price update: new levels of gold and silver
According to All India Bullion Association data, the precious metals market witnessed tremendous demand on Monday:
- Silver: A huge jump of Rs 7,000 or 3.04 percent was recorded in the price of white metal i.e. silver, after which it reached the level of Rs 2,37,000 per kg (including all taxes). It had closed at Rs 2,30,000 per kg in the last trading session on Friday.
- Sleep: Gold of 99.9 per cent purity rose by Rs 3,700, or 2.5 per cent, to Rs 1,51,500 per 10 grams (including all taxes). In the last market session, the yellow metal was stable at Rs 1,47,800 per 10 grams.
Main reasons for the surge: Domestic demand and global trends
Market experts and traders have mainly attributed this recovery to physical purchases ahead of the wedding season and favorable global trends. According to Saumil Gandhi, senior commodity analyst at HDFC Securities, dip-buying and fall in US treasury bond yields have improved the overall sentiment in the precious metals market.
There was a bullish trend in metals at the international level also. Spot gold gained $38.68, or about 1 percent, to trade at $4,531.67 an ounce, while silver was up 1.35 percent at $70.72 an ounce. Praveen Singh, head of commodities at Mirae Asset Sharekhan, said spot gold has reached around $4,530 an ounce, although it remains volatile as traders continue to keep an eye on the US dollar and oil prices.
Strengthening of gold and silver due to historical fall of rupee
Gold and silver prices in the domestic market also got additional support from the huge fall in the Indian rupee. The rupee crossed the 95 level for the first time and reached a record low of 95.2350 against the dollar. The rupee had initially gained some strength as the Reserve Bank of India limited onshore long dollar positions to curb speculative activities. But the rupee could not maintain its gains due to strong corporate demand and higher crude oil prices. Saumil Gandhi clarified that the weak rupee has provided additional support to domestic gold prices.
Still cautious in the market
Despite this spectacular comeback on Monday, the bullion market has faced huge losses this month (March). Since March 2, gold has fallen by Rs 21,300 (12.3 percent), while silver has fallen by Rs 63,000 (21 percent). According to Gaurav Garg, Research Analyst, Lemon Markets Desk, despite the current gains, the overall sentiment still remains cautious. Global markets have seen gold fall by nearly 16 per cent this month, one of its biggest falls in decades.