Global gold prices were, however, steady as investors were cautious ahead of the US congressional elections due on Tuesday. Gold prices today rose Rs 40 amid token buying by retailers and jewellers on the occasion of auspicious ‘Dhanteras’.
In Delhi, gold rates of 99.9% and 99.5% purity advanced by Rs 40 each to Rs 32,690 and Rs 32,540 per 10 gram, respectively. The precious metal had gained Rs 20 on Saturday. Sovereign gold, however, held flat at Rs 24,900 per piece of 8 gram.
There is a strong belief that buying precious metals on the auspicious day brings prosperity. Dhanteras is largely celebrated in north and west India.
Following gold, silver ready also edged up by Rs 10 to Rs 39,540 per kg but weekly-based delivery fell by Rs 183 to Rs 38,637 per kg in line with weak global cues.
Compared to last year’s Dhanteras, gold prices have surged by Rs 1,980 or over 6%, while silver has dropped by Rs 1,470 or 3.5%.
Bullion traders said sales were higher by nearly 20 per cent and are expected to pick up later in the day on offers including discount on diamond jewellery and making charges of gold jewellery, apart from other incentives.
Buying activity was more pronounced in ‘gold’ and ‘silver’ coins on the auspicious occasion, they said adding gold prices ruling at near six-year highs, marked just token purchases that restricted volume of business.
“Rupee’s trajectory is one of the major factor that will set the tone for domestic gold prices,” according to Religare Broking Ltd. The rupee weakened against the US dollar tracking losses in Asian currencies. At 4.01pm, the rupee was trading at 73.07 a dollar, down 0.87% from its previous close.
“Though most of the factors point towards a positive outlook for prices from a long term perspective, but there are certain downside risks too emanating from Fed’s tightening path and the strength in dollar index that can cap gains in the precious metal,” noted Religare Broking in a report.
Global spot gold rate was steady at $1,232.63 per ounce, while US gold futures were flat at $1,233.5 per ounce.
“Traders don’t want to extend any risk because of the growing uncertainty around the elections,” Reuters quoted Stephen Innes, APAC trading head at OANDA in Singapore as saying. “We are seeing increasing weariness that the U.S. dollar could run out of steam, which naturally plays into gold… If we get a little bit of escalation of U.S. political risk that plays even more favourably into gold,” Innes added.