It was tough for precious metals on the bourses on Friday as both gold and silver futures tumbled in line with the international market.
On Multi Commodity Exchange of India (MCX), Gold Futures for February delivery slipped by Rs 2086 or 4.10% as compared to previous day’s closing price. Silver futures were down by Rs 6,100 or 8.8% on Friday to close at Rs 63,850 per kg on the day on MCX.
The drop in gold futures on MCX India was inline with a slump in international gold prices, down nearly 4% at $1,833.83 per ounce with a spike in US Treasury yields and a strong dollar which dampened the appeal of the safe-haven metal.
A stronger dollar puts pressure on bullion and makes it more expensive to hold for other currencies.
Gold prices for physical buying in India on Saturday in Delhi, Mumbai, Bengaluru were as follows:
City 22 karat gold (per 10 gm) 24 karat gold (per 10 gm)
Delhi Rs 49,650 Rs 54,160
Mumbai Rs 49,820 Rs 50,820
Kolkata Rs 50190 Rs 52,890
Chennai Rs 47,920 Rs 52,270
Bengaluru Rs 47,500 Rs 51,800
The sentiment was boosted by Democrats’ taking control of the US Senate which fuelled hopes of large stimulus measures and rising inflation which also softened gold’s appeal.
The yellow metal slid below the key $1,900 technical level on Friday ahead of the US non-farm payroll data.
“We can only see the dollar gaining from here followed by the yields, which are rising because markets are anticipating interest rates to go up on economic recovery prospects,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.