July 6 brought some relief for anyone planning to buy gold or silver. A rally in the dollar weighed on the entire bullion market and pulled precious metal prices lower across India. Gold slipped by as much as Rs 1,100, but the sharper blow landed on silver, which fell much faster than gold and shed up to Rs 5,000 per kilogram. Here is a breakdown of the new rates, carat by carat and weight by weight.
Where 24 Carat Gold Stands
The purest form of gold saw the steepest cut. The 100 gram price dropped by Rs 1,100 to Rs 14,66,200, while 10 grams eased by Rs 110 to Rs 1,46,620. Similarly, 8 grams of gold fell by Rs 88 to Rs 1,17,296 and 1 gram slipped by Rs 11 to Rs 14,662. In other words, buyers will pay less today across every weight, from the smallest unit to the largest.
The 22 Carat Picture
The 22 carat variety, the one most widely used in jewellery, also softened. The 100 gram rate declined by Rs 1,000 to Rs 13,44,000, and 10 grams slipped by Rs 100 to Rs 1,34,400. Here too, 8 grams edged lower by Rs 80 to Rs 1,07,520 and 1 gram fell by Rs 10 to Rs 13,440. For those buying ornaments ahead of weddings or festivals, this dip is worth noting.
How Far 18 Carat Gold Fell
The 18 carat grade, common in lighter and mixed jewellery, dropped as well. The 100 gram price fell by Rs 800 to Rs 10,99,700, while 10 grams tumbled by Rs 80 to Rs 1,09,970. On top of that, 8 grams of gold is down by Rs 64 to Rs 87,976 and 1 gram is down by Rs 8 to Rs 10,997.
Silver Takes The Bigger Hit
Compared with gold, silver clearly underperformed on July 6 and slid much harder. The 1 kg rate plunged by Rs 5,000 to Rs 2.45 lakh, while 100 grams dropped by Rs 500 to Rs 24,500. Going smaller, 10 grams of silver dipped by Rs 50 to Rs 2,450, 8 grams eased by Rs 40 to Rs 1,960, and 1 gram settled at Rs 245 after a Rs 5 decline.
Why The Prices Dropped
The main reason behind this latest fall is the strength in the dollar, which is currently trading near the 100.97 mark. That surge offset the positive support the market was drawing from lower crude oil prices and a fading chance of a rate hike, the probability of which has now dropped to 50% from an earlier 66%. When the dollar strengthens, gold and silver become costlier for buyers in other currencies, and that puts selling pressure on the metals.
According to Ponmudi R., CEO of Enrich Money, "Commodity markets ended the week on a cautiously positive note as investors weighed softer U.S. economic data, shifting expectations for Federal Reserve policy, movements in Treasury yields and the U.S. dollar, and developments in global energy markets."
What The Trend Could Be Next
Despite the day's decline, analysts remain optimistic about precious metals this week. Both gold and silver have risen for two consecutive weeks, with gold surging around 1% last week on the back of weaker-than-expected US jobs data. According to analysts at Axis Direct, the ISM Manufacturing PMI came in at 53.3, below the market expectation of 53.8, while Non-Farm Payrolls rose by just 57,000 against a forecast of 114,000. This softer data reduced expectations of further interest rate hikes and lent support to gold prices.
In addition, a less hawkish tone from Fed Chairman Warsh strengthened bullish sentiment and helped prices hold firm at lower levels. Looking ahead, analysts at Axis say the release of the FOMC meeting minutes this week is expected to keep gold prices volatile, as markets seek further clarity on the Federal Reserve's policy outlook. Ponmudi also believes that sentiment in precious metals will stay closely tied to upcoming U.S. inflation data and evolving expectations for the Fed's policy trajectory.
