Due to very low domestic demand and selloff in international markets, prices of gold dipped by almost Rs 1,000/10 gm in the last week in Indian markets. Experts feel in the coming week Indian bullion market would hold a steady level for both gold and silver. On the other hand, silver was down by record Rs 4,500/kg since August 9, 2021. The white metal suffered its worst slump since August 2020.
Recovery in gold
On August 9 in Indian market 24 carat gold opened at Rs 47,730/10 gm. After a rough week for multiple reasons gold closed at Rs 46,700/10 gm on Friday, August 13. On Monday, August 9, gold price was down by almost Rs 1100/10 gm than last Friday, August 6.
Last week, the price of 24 carat gold went up on a single occasion on Thursday, August 12. That day gold price went up by Rs 350/10 gm.
Gold prices were trading near record low level in midday in US dealings. Importantly, gold bulls have stabilised the market following recent selling pressure that drove prices to a more-than-four-month low on last Monday (August 9). But I hope in the next week the price will hold steady, said Amit Khare, AVP, research commodities, Ganganagar Commodities Ltd.
Gold prices tumbled in the first half of last week after stronger than expected employment data in the US, while US gold futures are trading with highly negative sentiments. However, it recovered to some extent in the later half. The outlook is bearish for safe heaven as it faces strong fundamental headwinds including rising dollar and bond yield, said Sandeep Matta, founder, TRADEIT Investment Advisor.
Gold prices were sharply higher at the later half, supported by some bargain buying in the cash market and short covering in the futures market. Silver prices were just slightly up. The precious metals bulls have stabilised their markets at mid-week, following recent selling pressure, added Amit Khare.
Silver at record low
Due to US job data, silver almost crashed by Rs 3,200/kg on Monday and opened at Rs 64,000/kg. But since August 9 silver price regularly dipped and closed at Rs 62,600/kg level, down by Rs 1,400/kg.
Since last week silver slumped as much as 10% over the last 10 days, this is the one of their biggest losses since markets were first roiled by the Covid-19 pandemic in early 2020. Better-than-expected US employment data sparked the latest selloff in gold and silver both. In the last trade a huge sell off was seen in bullion due to US monthly payroll data, Khare added.
Traders confirmed that this is the highest ever drop in spot silver price almost in the past 11 months.
Technically, bullion market is stabilising after prices slumped to a four-month low on August 9. Silver movement is still under pressure. Silver price last witnessed a hike on August 4, since then the price was dropped by almost Rs 5,000. Hope after the Independence Day the silver market would turn around, hoped Bablu Dey from Swarnosilpo Bachao Samiti (Save Goldsmiths Forum).
Gold retailers confirmed that this drop in price might lure more customers to buy gold and silver before Ganesh Chaturthi and the festive season. Footfall in the retail shops for the last two-three days have gone up by 7-8%, confirmed multiple shop owners from Kolkata.