Gold prices in Delhi's bullion market rose for a second consecutive day on Friday, according to local traders, keeping the metal within striking distance of the Rs 1.61 lakh mark for 10 grams. Gold of 99.9 percent purity climbed Rs 1,400 from Thursday's closing rate of Rs 1,59,500 per 10 grams to Rs 1,60,900 per 10 grams, inclusive of all taxes. Silver, on the other hand, showed no movement at all and held steady at Rs 2,40,500 per kilogram, even as gold continued its upward run. The bullion market remains shut on both Saturdays and Sundays, which means Friday's closing rates will stay in effect until fresh trade resumes on Monday.
Strong Domestic Buying Fuels the Rally
Traders said the rise in gold prices stemmed from robust buying interest within the domestic bullion market, where jewellers and retail buyers have been stepping up purchases. At the same time, investors are treading cautiously ahead of key global economic data that could shape the direction of interest rates and, in turn, the outlook for precious metals over the coming weeks. That caution on the international side is what is keeping overall price swings within a relatively narrow band for now, even as local demand pushes gold higher within India.
Silver Down 40% From Its January Peak
Siddhartha Khemka of Motilal Oswal Financial Services said domestic silver prices have tumbled more than 40 percent from their January peak of over Rs 4 lakh per kilogram, now trading in a range of roughly Rs 2,30,000 to Rs 2,40,000 per kilogram. Despite this steep correction from record levels, he noted that investment demand continues to stay weak, deepening concerns over the stock piling up with dealers across the country. Khemka said, "If demand does not improve, Indian dealers' silver orders of nearly 2,000 tonnes could add further to the stock burden." His comments point to a widening gap between the metal's falling price and the pace at which buyers are willing to absorb existing and incoming supply.
Both Metals Soften in Global Markets
In international markets, spot gold slipped marginally to $4,465.34 an ounce, while silver fell 0.38 percent to $66.72 an ounce, tracking a broadly cautious mood among global traders. Saumil Gandhi of HDFC Securities said, "Traders are treading cautiously ahead of the crucial US non-farm payrolls report for August, which is keeping prices confined to a narrow range." The payrolls report is closely tracked because it offers one of the clearest early readings on the health of the US labour market.
Markets Now Watch US Jobs Data and Inflation Numbers
According to Gandhi, the market's attention is currently fixed squarely on US employment figures, with inflation data due the following week expected to offer further clues about the US Federal Reserve's monetary policy stance. He explained that data weaker than expected could deepen the dollar's slide and lend support to gold, whereas stronger numbers or fresh hawkish signals from the Fed could revive rate hike expectations and put renewed pressure on prices. Analysts believe the near term trajectory of both gold and silver will largely hinge on how these two data releases, the jobs report and the inflation print, actually turn out in the coming days.
