Strengthening domestic currency continued to exert downward pressure on precious metal prices in the local bullion market. As the Indian rupee made notable gains against the US dollar, the landed cost of imported bullion eased, resulting in back-to-back price declines for both gold and silver on Tuesday. During the second trading session of the week, gold shed 400 rupees to settle at the 1.52 lakh rupees per 10 grams mark, while silver also witnessed persistent selling interest.
Gold Prices in the Delhi Bullion Market
According to information released by the All India Sarafa Association, the price of 99.9 percent purity gold in Delhi's spot market slipped by 400 rupees to settle at 1,52,600 rupees per 10 grams on Tuesday. This followed a steep downturn on Monday, when 99.9 percent purity gold dropped by 1400 rupees to end at 1,53,000 rupees per 10 grams. The two-day pullback has tempered local prices following a period of elevated levels.
Silver Extends Losses After Friday's Sharp Rally
Following gold's trajectory, silver prices also retreated for the second straight session. On Tuesday, silver declined by 500 rupees to end at 2,26,000 rupees per kilogram. During Monday's session, the white metal had tumbled by 2000 rupees to finish at 2,26,500 rupees per kilogram. These back-to-back corrections come after a strong rally seen on Friday of the previous week, when silver surged by 4500 rupees in a single day to reach 2,28,500 rupees per kilogram.
Rupee Strengthens for Third Consecutive Session
In the foreign exchange market, the Indian rupee gained ground for the third straight day, advancing by 40 paise to settle at 95.38 against the US dollar. The domestic unit received significant support from regulatory measures initiated by the Reserve Bank of India, which were intended to curb spot dollar demand and prevent excessive speculative positioning in the foreign exchange market.
Lower Import Costs Ease Domestic Prices
Explaining the market dynamics, Saumil Gandhi, Senior Analyst (Commodities) at HDFC Securities, noted that the rupee gained more than 1.5 percent over the last two sessions. Because international bullion trades in US dollars, an appreciation in the domestic currency reduces the landed import cost of gold and silver. This drop in inbound acquisition costs directly transmitted into lower spot rates across physical domestic counters.
