Gold prices fall for third day in a row, with gold falling by ₹2,600 in Delhi

In the national capital, Delhi, gold prices fell for the third consecutive day on Wednesday. A strong US dollar and weak global trends dampened investor confidence, leading gold prices to fall by Rs 900 to Rs 1.54 lakh per 10 grams. The special thing is that in the last three days, the price of gold has decreased by 2600 rupees. On Monday, gold rose to Rs. 200 was reduced, while on Tuesday Rs. 1500 per ten grams reduction was observed.

Gold of 99.9 per cent purity closed at Rs 1,54,900 per 10 grams on Tuesday. However, silver prices remained unchanged at Rs 2.42 lakh per kg (including all taxes) for the second consecutive day, according to local traders.

Jatin Trivedi, Commodity and Currency Research Analyst (VP) at LKP Securities said that gold prices witnessed weakness on Wednesday due to profit-booking by traders at higher levels. He said the dollar index moved towards the 100.85 level, which put further pressure on bullion (gold and silver). Although gold prices have fallen in recent times, the precious metal is still much more expensive than it was a year ago. This change has also changed the way domestic consumers buy gold.

A change in the way gold is bought

According to Akshat Garg, head of research and product at Choice Wealth, the 15 per cent decline in Ganesh Chaturthi sales does not mean that Indians’ love for gold has waned. Rather, it reflects a change in the way they buy gold. Garg said domestic gold prices have increased by about 60 per cent in a year – from Rs. 98,000 to Rs. 1.57 lakhs per 10 grams.

This is due to the global boom, depreciation of the rupee and the increase in import duty from 6 per cent to 15 per cent in April. He said that at these prices, traditional heavy necklaces no longer fit into the family budget. Hence, buyers are opting for lighter jewellery, exchanging old jewelery and investing money in coins, digital gold and ETFs.

Garg said that consumers are now keeping jewelery and investments separate. He said that jewelery is bought for special occasions like weddings, while gold investment is mostly done in such financial forms that involve no making charges, are easy to store and can be bought in small quantities. In the global market, gold fell by $41.49 (or 1%) to $4,317.09 an ounce, while silver fell nearly 3% to $65.17 an ounce.

Gold and silver fell in foreign markets

Kainat Chenwala, AVP of Commodity Research at Kotak Securities, said spot gold prices fell below $4,320 an ounce and silver also fell to the $65 level. This happened as the dollar strengthened to 100.86, its highest level since July. Dovish statements by Federal Reserve officials reinforced expectations of further monetary tightening.

Meanwhile, Richmond Fed President Tom Barkin also supported the dovish trend, pointing out that a rise in interest rates and the solid prospect of more hikes could lower inflation expectations among businesses and ease price pressures without any slowdown in economic activity.

Such expectations of monetary policy tightening had an impact on bullion (gold and silver), Chenwala said. When interest rates rise, precious metals like gold become less attractive to investors and come under pressure.