Gold prices further drop as Rupee weakens

Hyderabad: The prices of gold and silver were trading lower on Friday as the Indian rupee slipped against the US dollar. The US dollar rose the highest in the past three months after the investors turned positive to the US President Donald Trump's statement indicating easing of the trade war with China.

Gold (0.995 purity) was trading at Rs 37,622 per 10 grams in the Indian bullion markets. Gold prices fell from the recent high of Rs 39,885 per 10 grams. Similarly, the silver price also fell by Rs 5,220 to Rs 51,489 per kilogram.

Gold October futures on MCX fell 0.3 per cent to Rs 37,7100, while December futures eased 0.25 per cent and were trading at Rs 46,270.

Gold in the global markets was trading flat at $1,5050.74 per ounce. This is 0.7 per cent lower. The gold price rose two per cent during the previous week. The gold price in the international market rose to a six-year high of $1,550 an ounce and later eased to $1,506.25 level.

Earlier, rising geopolitical concerns, global growth worries dampened the investor sentiment and supported the gold prices.

However, bullion experts forecast a possible rise in gold prices on lower interest rate projection. The opportunity cost of holding non-remunerative gold, considering the current situation, is expected to come down owing to lower interest rate. Hence, buying in gold is on the cards. Because the global concerns are not yet over, said an analyst. The enhanced risk sentiment put pressure on the yellow metal. The US-China trade issue, US economic data and other major geopolitical factors would continue to impact the greenback and risk sentiment. These factors will further influence the gold prices globally, observe bullion analysts.

Re at 70.93/USD

The home currency fell five paise to 70.93 against the US dollar on Friday. The Indian currency was trading in the range of 70-91-70.89 in the interbank foreign exchange (forex) market. Rupee closed at 70.88/US dollar on Thursday.