Gold falls Rs 1,800, silver slumps amid strong dollar, oil surge

Gold prices in New Delhi fell ₹1,800 to ₹1.54 lakh per 10 grams while silver dropped ₹6,500, pressured by rising crude oil prices, a stronger US dollar, and expectations of prolonged higher interest rates impacting global bullion markets

New Delhi: Gold prices retreated by Rs 1,800 to Rs 1.54 lakh per 10 grams in the national capital on Tuesday, while silver plunged Rs 6,500 to Rs 2.44 lakh per kilogram as a renewed surge in crude oil rates and a firm US dollar rattled global bullion markets.

According to the All India Sarafa Association, the yellow metal of 99.9 per cent purity fell Rs 1,800, or 1.15 per cent, to Rs 1,54,300 per 10 grams (inclusive of all taxes). The metal had settled at Rs 1,56,100 per 10 grams on Monday. Silver prices also slumped by Rs 6,500, or nearly 3 per cent, to Rs 2,44,000 per kilogram (inclusive of all taxes). The white metal had closed at Rs 2,50,500 per kg in the previous market session.

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“Gold dropped to a three-week low on Tuesday as rising energy prices heightened inflation concerns and reinforced expectations for a prolonged period of higher interest rates,” Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, said.

Increased inflation expectations have bolstered the belief in a more hawkish policy stance, leading to higher bond yields. Consequently, this situation adds additional downward pressure on prices, he added.
Traders also appeared to be trimming positions ahead of key central bank decisions, including that of the US Federal Reserve, which further contributes to the downward pressure, Gandhi said.

In the international market, spot gold fell USD 95.37, or 2.04 per cent, to USD 4,586.50 per ounce while silver slipped USD 2.33, or 3.09 per cent, to USD 73.18 per ounce.

Spot gold was trading more than 1 per cent lower near USD 4,580 per ounce as crude oil and dollar extended gains following reports that President Donald Trump was dissatisfied with Iran’s latest proposal, which reportedly included delaying nuclear talks, Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said.

As a result, inflation concerns and fading hopes of interest rate cuts by the US Federal Reserve are supporting the dollar and weighing on precious metals, he added. Singh said that investors will also track major US economic numbers, including ADP weekly employment readings and Conference Board consumer confidence figures due later in the day.