NEW DELHI, Feb 28: Gold prices declined by Rs 500 to hit a two-week low of Rs 87,700 per 10 grams in the national capital on Friday due to reduced off-take from jewellery traders and investor selling, according to the All India Sarafa Association.
The precious metal of 99.9 per cent purity or pure gold had concluded at Rs 88,200 per 10 grams in the previous trading session.
So far this year, gold prices have increased by Rs 8,310 or 10.5 per cent to Rs 87,700 per 10 grams compared to Rs 79,390 per 10 grams on January 1.
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Gold of 99.5 per cent purity (standard gold) depreciated by Rs 500 to Rs 87,300 per 10 grams from Thursday’s closing level of Rs 87,800 per 10 grams.
Extending the loss for the third straight day, silver prices also tanked by Rs 2,100 to hit a two-week low of Rs 96,400 per kg. The white metal had finished at Rs 98,500 per kg in the previous market close.
“Gold and silver declined once again due to a strong rebound in the dollar index. The US President’s announcement of new tariffs on Mexico and Canada, set to take effect on March 4th, strengthened the dollar, exerting downward pressure on metal prices,” Rahul Kalantri, VP Commodities at Mehta Equities Ltd, said.
Further, Trump’s announcement of imposing an additional 10 per cent tariff on China, raising the total rates to 20 per cent on imports into the US decreased the optimism that markets had regarding a potential postponement of these tariffs, as per commodities experts.
Meanwhile, in futures trade on the MCX, gold contracts for April delivery plunged by Rs 484 to Rs 84,712 per 10 grams.
On the global front, Comex gold futures fell USD 21.20 per ounce or 0.73 per cent to USD 2,874.70 per ounce. Also, spot gold went lower by USD 15 per ounce to USD 2,862.53 per ounce.
“Gold prices are correcting as the US dollar strengthens, driven by rising US bond yields suggesting that the US Federal Reserve may delay rate cuts due to persistent inflationary pressures in the economy,” Chintan Mehta, Chief Executive Officer of Abans Holdings said.
According to HDFC Securities’ Senior Analyst of Commodities Saumil Gandhi, this week’s fall in gold was primarily driven by investors booked profits from a record-breaking rally and pressured by a recovery in the US dollar. Further, the dollar index hovered around the 107 level on Friday, maintaining its gains from the previous two sessions and poised to close higher after three consecutive negative weekly closings.
Comex silver futures in the Asian market hours traded 1.21 per cent lower at USD 31.72 per ounce. (PTI)
