In the past few days gold rallied to a record high in India. Is it getting tired after this run? A Bloomberg compilation of data shows gold was trading at US $3973.15 per ounce in Singapore early in the morning. 24K is ruling at ₹121470 per 10 grams 22K at ₹111340 and 18K at ₹91100. The question is if this is the precursor to a fall below the ₹1.2 lakh level or if there is support in the market. Prices based on domestic purity Gold Purity Price (per 10 grams) 24K ₹121470 22K ₹111340 18K ₹91100 This chart makes it clear that even after a correction gold is still trading at very high levels. The past rally had come on expected interest-rate cuts from the US Federal Reserve sustained inflows into bullion-backed exchange-traded funds and a wave of central-bank buying. City-Wise spread (Gold: 24K / 22K / 18K) City 24K 22K 18K Chennai Rs 12196 Rs 11179 Rs 9324 Mumbai Rs 12147 Rs 11134 Rs 9110 Delhi Rs 12162 Rs 11149 Rs 9125 Kolkata Rs 12147 Rs 11134 Rs 9110 Bangalore Rs 12147 Rs 11134 Rs 9110 Hyderabad Rs 12147 Rs 11134 Rs 9110 Kerala Rs 12147 Rs 11134 Rs 9110 Pune Rs 12147 Rs 11134 Rs 9110 Vadodara Rs 12152 Rs 11139 Rs 9115 Ahmedabad Rs 12152 Rs 11139 Rs 9115 Jaipur Rs 12162 Rs 11149 Rs 9125 Lucknow Rs 12162 Rs 11149 Rs 9125 Coimbatore Rs 12196 Rs 11179 Rs 9324 Madurai Rs 12196 Rs 11179 Rs 9324 Vijayawada Rs 12147 Rs 11134 Rs 9110 Patna Rs 12152 Rs 11139 Rs 9115 Nagpur Rs 12147 Rs 11134 Rs 9110 Chandigarh Rs 12162 Rs 11149 Rs 9125 Surat Rs 12152 Rs 11139 Rs 9115 Bhubaneswar Rs 12147 Rs 11134 Rs 9110 Mangalore Rs 12147 Rs 11134 Rs 9110 Visakhapatnam Rs 12147 Rs 11134 Rs 9110 Nashik Rs 12150 Rs 11137 Rs 9113 Mysore Rs 12147 Rs 11134 Rs 9110 Salem Rs 12196 Rs 11179 Rs 9324 Rajkot Rs 12152 Rs 11139 Rs 9115 Trichy Rs 12196 Rs 11179 Rs 9324 Ayodhya Rs 12162 Rs 11149 Rs 9125 Cuttack Rs 12147 Rs 11134 Rs 9110 Davanagere Rs 12147 Rs 11134 Rs 9110 The minimum difference between two cities in the above table is at Rs 12147-Rs 12162 for 24K. While the average is high in some cities the premiums are still higher. Chennai Coimbatore Madurai and Trichy are some of the examples. Silver: A quick view City 10 gram 100 gram 1 Kg Chennai Rs 1629 Rs 16290 Rs 162900 Mumbai Rs 1504 Rs 15040 Rs 150400 Delhi Rs 1504 Rs 15040 Rs 150400 Kolkata Rs 1504 Rs 15040 Rs 150400 Bangalore Rs 1504 Rs 15040 Rs 150400 Hyderabad Rs 1629 Rs 16290 Rs 162900 Kerala Rs 1629 Rs 16290 Rs 162900 Pune Rs 1504 Rs 15040 Rs 150400 Vadodara Rs 1504 Rs 15040 Rs 150400 Ahmedabad Rs 1504 Rs 15040 Rs 150400 Jaipur Rs 1504 Rs 15040 Rs 150400 Lucknow Rs 1504 Rs 15040 Rs 150400 Coimbatore Rs 1629 Rs 16290 Rs 162900 Madurai Rs 1629 Rs 16290 Rs 162900 Vijayawada Rs 1629 Rs 16290 Rs 162900 Patna Rs 1504 Rs 15040 Rs 150400 Nagpur Rs 1504 Rs 15040 Rs 150400 Chandigarh Rs 1504 Rs 15040 Rs 150400 Surat Rs 1504 Rs 15040 Rs 150400 Bhubaneswar Rs 1629 Rs 16290 Rs 162900 Mangalore Rs 1504 Rs 15040 Rs 150400 Visakhapatnam Rs 1629 Rs 16290 Rs 162900 Nashik Rs 1504 Rs 15040 Rs 150400 Mysore Rs 1504 Rs 15040 Rs 150400 Salem Rs 1629 Rs 16290 Rs 162900 Rajkot Rs 1504 Rs 15040 Rs 150400 Trichy Rs 1629 Rs 16290 Rs 162900 Ayodhya Rs 1504 Rs 15040 Rs 150400 Cuttack Rs 1504 Rs 15040 Rs 150400 Silver although at lower levels than the peak is still trading at a higher level. In Chennai Hyderabad Coimbatore Madurai and Visakhapatnam city-wise spreads in silver are still higher. Analyst take? A dip from recent peaks may signal profit booking after the steep rally. International price being less than US $4000 per ounce could also be a sign of a pause or consolidation in price. Retail buyers/investors Gold may test support below ₹1.20 lakh per 10 g on further weakening of global cues Silver has relatively less city-wise premium may offer some value but depends on industrial demand and jewellery buying Purchase-planning buyers (jewellery investment saving) may not be the best time to go forward. Best to use this time to study making-charges compare city spreads and look for global macro cues (US Fed policy dollar trajectory central-bank accruals) Analysts have said that since gold is a much larger market compared to a few years ago the actual flows and imports (in or out) are small compared to overall volumes in the market. This means that even a small flow or booking can now change the price by a bigger amount. A dip in interest rates or a weaker dollar may trigger a new rise but stronger data points or a hawkish Fed will reverse the sentiment in a hurry. Story Highlights Gold is still trading at near all-time highs and the small pullback it is currently witnessing on top of such a high base points to a consolidation period. With the next bull leg looking far from certain investors thinking of buying gold must not only consider “how high” but “is it the right time to enter?” The municipal premium is also still at play and for large buys the difference in city-wise premiums make a difference. Silver with more attractive spreads may be where the next leg-up will be in the opinion of some traders if industrial demand picks up or if festivals see fresh buying for gold. But as always with precious metals look at the global leading indicators local tax/making-charge structure and city specific premiums. The next big move in gold may come more from global-macro factors than local-festive factors.