A big fall in gold prices was recorded in the bullion market of the national capital on Thursday, while silver remained on a sharp rise for the third consecutive day. According to All India Bullion Association, gold fell by ₹640 on weak global cues and weak buying by stockists and retailers. According to PTI news, the price of gold of 99.9% purity fell by ₹640 to close at ₹1,29,460 per 10 grams. Gold of 99.5% purity declined by ₹640 to close at ₹1,28,860 per 10 grams.
Reason for decline: Reduction in Russia-Ukraine tensions
Saumil Gandhi, Senior Analyst – Commodities, HDFC Securities, cited the main reason for this weakness in gold. He said progress toward a Russia-Ukraine peace deal has eased geopolitical tensions, removing the ‘geopolitical premium’ and allowing investors to book profits.
Silver becomes expensive by ₹5100
Unlike gold, silver prices saw a sharp rise. Silver price rose by ₹5,100 to ₹1,68,200 per kg (including all taxes). This is the third consecutive session of rise in silver. In the last three sessions, silver has gained ₹13,200, well above Monday’s level of ₹1,55,000 per kg.
International market and stockpile in China
Gold also softened in the global market, while silver strengthened marginally. Spot gold was down $5.60, or 0.13%, at $4,158.38 an ounce. While spot silver was trading with a slight rise at $53.39 an ounce. Gandhi said that trading volume remained low due to Thanksgiving holiday in America and now the market is waiting for new motivating signals.
A major reason for the rise in silver prices are supply concerns, which have been heightened by reduced stockpiles in China. Gandhi said that global silver reserves have reached the lowest level in the decade. Silver stocks in warehouses linked to the Shanghai Futures Exchange are now at their lowest level since 2015. Large quantities of silver have recently been shipped to London to ease supply shortages, which is supporting prices.
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