Investors saw the prices of precious metals declining by up to 4 per cent today in Delhi, with silver tumbling to Rs 2.65 lakh per kilogram and gold sliding to Rs 1.63 lakh per 10 grams, reported PTI. This move comes amid a strong US dollar position against the Indian rupee and the ongoing global tensions in the Middle East region.
As per the All India Sarafa Association, the white metal slumped by Rs 11,000, or 3.97 per cent, to Rs 2,65,500 per kilogram (inclusive of all taxes) from Thursday's closing level of Rs 2,76,500 per kg. In the bullion market, gold of 99.9 per cent purity also declined by Rs 2,000, or 1.21 per cent, to Rs 1,63,200 per 10 grams (inclusive of all taxes).
"While short-term volatility and long unwinding by traders may persist, the outlook remains constructive. Once geopolitical tensions stabilise, a resurgence in central bank acquisitions and retail investment is expected to provide a strong floor for prices," said Dilip Parmar, Senior Research Analyst, HDFC Securities.
As per PTI, gold price declined by Rs 992 to Rs 1.59 lakh per 10 grams in the futures trade on Friday, tracking a bearish sentiment in the international markets.
Analysts believe that the yellow metal had come under pressure as the US dollar strengthened, making the precious metal less attractive for holders of other currencies.
The major reasons for this decline are a strengthening US dollar, supported by rising oil prices and geopolitical concerns in the Middle East.
"Concerns have also grown over the Federal Reserve's approach toward rate cuts, as previous FOMC meeting minutes and recent expectations do not show much inclination towards monetary easing," said Manav Modi, Analyst - Commodities at Motilal Oswal Financial Services Ltd to PTI.