Gold down by Rs 630 on firm rupee, weak global cues

Gold prices on Wednesday dived by Rs 630 per 10 grammes to a one-and-a-half-month low of Rs 30,670 in bullion markets here, tracking signs of the rupee gaining strength and weak global cues.

In the Delhi bullion market, gold lost Rs 500 to Rs 31,200 per 10 grammes.

While the yellow metal lost Rs 545 to Rs 31,125 in Kolkata, prices were down by Rs 670 at Rs 30,760 in Chennai.

“In the international market, gold prices declined by nearly $30, which leads to fall in gold prices in domestic market. Moreover, rupee has also increased which made gold import cheaper,” PC Jeweller Managing Director Balram Garg said.

 

Meanwhile, the rupee on Wednesday gained 30 paise against the dollar to end at 54.55, snapping five days of losing streak. A stronger rupee makes gold imports cheaper. India is a net importer of the precious metal.

In futures trade at the Multi Commodity Exchange, gold for delivery in February was down at Rs 104, or 0.3 per cent, to Rs 30,952 per 10 gramme in a business turnover of 3,346 lots. Similarly, the metal for delivery in April fell by Rs 98, or 0.3 per cent, to Rs 31,374 per 10 grammes in 168 lots.

In New York, the precious metal dropped to an over three-month low by falling sharply by $27.20 to $1,670.90, as signs that US lawmakers might be closer to a budget deal, boosted equities and reduced demand for the metal as an alternative asset, market experts said.

A sluggish domestic demand at prevailing higher levels also contributed to price fall. Some investors were seen shifting their funds from weakening bullion as equity markets have been rising, they added.