On Tuesday, gold prices in the national capital Delhi increased by Rs 1,500 and again reached the level of Rs 1.60 lakh per 10 grams. The reason for this was the weakening of the US dollar and the improving environment in the bullion market. According to local market experts, the price of gold with 99.9 percent purity increased by Rs 1,500 to Rs 1,60,300 per 10 grams (including all taxes), whereas on Monday it had closed at Rs 1,58,800 per 10 grams. This increase happened when gold prices were low in the global market. Experts believe that this rise in domestic prices came due to the weakening of the US dollar and increasing interest from investors.
Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities, said that gold prices improved on Tuesday, which was supported by the fall in crude oil prices and decline in US dollar and treasury bond yields. However, silver prices remained stable at Rs 2,55,700 per kg. He said that the market environment improved after Iran and Israel agreed to stop attacks on each other. Additionally, US President Donald Trump's statements indicated progress towards a formal ceasefire, raising hopes for a diplomatic solution to the dispute. Easing geopolitical tensions eased concerns about energy-driven inflation, giving precious metals support after recent weakness. However, the recovery remained limited as investors continued to weigh the future of US monetary policy, Gandhi said.
In the international market, spot gold fell marginally to $ 4,326.78 an ounce, while silver rose marginally to $ 68.28 an ounce. Spot gold is trading below the $4,330 an ounce level as traders await further signals on the situation in the Middle East, said Praveen Singh, head of commodities at Mirae Asset Sharekhan. Meanwhile, crude oil prices fell as US President Donald Trump claimed that a good deal between Washington and Tehran was going to happen soon. Renisha Chainani, head of research at Augmont, said investors were closely watching US consumer price index and producer price index data due on Wednesday for clear signals about the direction of the Federal Reserve's monetary policy. He said that there is also a lot of hope that the European Central Bank will increase interest rates this week.
