Gold Extends Rally in Delhi Bullion Market, Rate Nears Rs 1.61 Lakh Mark as Silver Prices Hold Firm

Gold prices rose for a second straight day in Delhi's bullion market on Friday, touching Rs 1,60,900 per 10 grams, while silver held steady at Rs 2,40,500 per kilogram.

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.

What this means for you
If you are planning to buy gold or silver for a wedding or the festive season, this rally will have a direct effect on your budget.

• Across India: With gold rising for a second straight day, 10 grams of gold now costs Rs 1,400 more nationwide than it did on Thursday. Anyone booking jewellery now may need to stretch their budget to match the higher rate.
• In Delhi: Gold in Delhi's bullion market has touched Rs 1,60,900 per 10 grams, while silver remains steady at Rs 2,40,500 per kilogram. Local buyers could use this pause in silver prices to their advantage before demand potentially pushes rates higher.
• For investors: Silver is down 40 percent from its January peak, so anyone who bought near that high is currently sitting on losses. New investors may see this as a cheaper entry point, but should weigh the risk of demand staying weak.
• What to watch next: US inflation data due next week will help decide where gold and silver head next. It may be worth waiting for that data before making a big purchase.

Questions & Answers

1. What was the gold rate in Delhi on Friday?
Gold of 99.9 percent purity rose Rs 1,400 to reach Rs 1,60,900 per 10 grams, inclusive of all taxes.

2. Did silver prices change?
Silver prices remained unchanged, holding steady at Rs 2,40,500 per kilogram.

3. How much has silver fallen compared to January?
According to Siddhartha Khemka, silver has dropped more than 40 percent from its January peak of over Rs 4 lakh per kilogram.

4. What is driving the moves in gold and silver?
Strong domestic buying pushed gold higher, while weak investment demand is keeping pressure on silver.

5. What were international gold and silver prices?
Spot gold stood at $4,465.34 an ounce while silver fell 0.38 percent to $66.72 an ounce.

6. What data is the market watching next?
Markets are focused on the US non-farm payrolls report and next week's inflation data, which will guide the Fed's policy direction.

7. When will the bullion market trade next?
The bullion market stays closed on Saturdays and Sundays, so the next rates will be set on Monday.

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