Domestic gold prices fell by nearly 9% or Rs 7,800 per 10 gram over three sessions since July 23, Tuesday, Anuj Gupta, Head Commodity & Currency at HDFC Securities said.
The deep cut was on account of local and global factors.
On Tuesday, yellow metal prices tanked sharply by Rs 4,284 after Finance Minister Nirmala Sitharaman cut customs duty on gold to 6%, Gupta said. On Thursday, they were down by 4.20% or Rs 3,563, he informed.
At the same time, silver prices corrected by 7.37% or Rs 5,008 per kg.At 5:15 pm, the August gold futures were trading at Rs 67,765, up by Rs 303 or 0.45% and September silver futures were at Rs 81,361, up by Rs 30 or 0.04%.”Market participants will closely monitor the US PCE deflator inflation data to be released today as it is the Fed’s preferred gauge of inflation. Apart from that, the focus will be on the US personal income and spending (June), too,” Praveen Singh, Associate Vice President, Fundamental Currencies and Commodities at Sharekhan by BNP Paribas said. Softer-than-expected US PCE deflator inflation data may help the metal to recoup some of its recent losses, though the metal is yet to be out of the woods unless Chinese demand improves or there is a clear possibility of multiple Fed rate cuts, he added.
“Prices have taken a hit recently due to the Yen rising with safe-haven buying seen in Yen. However, with the Fed policy meeting next week, all eyes are set on any updates regarding a potential rate cut in September, which could pull Gold prices higher again towards $2,400 in Comex and around Rs 70,000 in MCX,” said Jateen Trivedi, who is Vice President, Research Analyst – Commodity and Currency, LKP Securities.
In the international market gold prices corrected almost 4.50% from their recent peak due to a potential slowdown in seasonal demand for physical gold, reflecting worry about the worsening recession in jewellery and retail investment demand, particularly in China.
Gupta sees support at Rs 66,300-65,560/64,460 while resistance at Rs 69,945-71,925/73,610.
His advice to traders is to avoid any trade in gold futures at least for this month as the August contract expiry is near.
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