Hyderabad: The gold price on Wednesday fell Rs215 to Rs38,676 per 10 grams owing to the stronger rupee. The yellow metal price eased for a second consecutive day. At one point of time, the yellow metal in New Delhi bullion slipped below Rs 38,000 per 10 rams. Similarly, the silver price also eased by Rs770 to Rs47,690 per kg. The drop in investment demand and rise of home currency by 51 paise were the major reasons for declining of the gold price, said, Bullion traders. The Indian rupee in forex market reached to 71.43 against the US dollar.
Gold prices rose 20 per cent in India this year so far thanks to the rupee depreciation against the greenback and hike in import duty.
Further, the gold price in the international market was to trading lower ahead of the Federal Open Market Committee (FOMC) meeting in the US. Gold was trading at $1,500 an ounce in the international market. The US policymakers may announce a reduction of 25 basis points (bsp) in interest rates.
Commodity analysts forecast volatile price movements in the bullion until the outcome of the US Fed meeting. Gold prices may hover in the range of Rs37,800-38,200 per 10 grams.
Further, this impacted the domestic jewellery market, as well. The demand for jewellery has been declining, while inflows of old jewellery are increasing, said jewellers.
Gold futures (October contract) on MCX traded at Rs 37,795 per 10 grams, down Rs 221, or 0.58 per cent.
Global traders and investors use the yellow metal as a hedge product against oil-led inflation. The pullback in global crude oil prices reduced inflationary concerns. This puts pressure on the gold, observed the bullion traders. Once Saudi Arabia comes back to its normal production level, the oil price will decrease, said an analyst. Saudi Arabia is expected to restore normal customer supplies by the end of September.
Meanwhile, Brent futures, which rose to $72 a barrel early this week, were trading at $64 a barrel.