Gold Falls a Fifth Day, Down Rs 2,700 to Rs 1.58 Lakh

Delhi Bullion Rates

Gold prices in India's national capital fell for a fifth straight session on Tuesday, dropping Rs 2,700 to Rs 1,58,200 per 10 grams, ThePrint reported, citing news agency PTI and local traders.

That figure is for gold of 99.9 per cent purity and includes all taxes. It compares with Monday's close of Rs 1,60,900 per 10 grams and marks a nearly two-week low. The metal last traded around this level on August 19, when it was quoted at Rs 1,58,000.

Across the five sessions, gold has fallen Rs 8,900, or 5.3 per cent, from Rs 1,67,100 per 10 grams recorded on August 25. Silver dropped Rs 5,000 to Rs 2,40,500 per kg, after ending flat at Rs 2,45,500 on Monday.

The Times of India reported Chennai opening rates of Rs 14,385 per gram for 22-carat gold and Rs 12,155 per gram for 18-carat gold. On the Multi Commodity Exchange, the October delivery contract fell Rs 2,045, or 1.31 per cent, to Rs 1,54,236 per 10 grams on Monday, with turnover of 2,680 lots.

The Global Sell-Off

Overseas, the decline was sharper. Spot gold fell USD 80.61, or 2 per cent, to USD 4,368.58 per ounce, while silver dropped nearly 3 per cent to USD 64.68 per ounce, according to ThePrint.

The Times of India, citing Reuters, gave a different picture for silver on Monday, reporting spot silver up 1 per cent at USD 66.99 per ounce even as gold fell. That publication said silver is still up more than 16 per cent this month after touching its highest level since mid-June on Friday. Spot platinum slipped 1.1 per cent to USD 1,799.89 per ounce.

Gold fell more than 3 per cent on Friday, its biggest one-day drop since June 10, The Times of India reported.

Rate Outlook and Oil

Analysts pointed to two pressures. A fresh escalation between the United States and Iran has pushed oil prices higher, reviving inflation concerns, and Federal Reserve Chair Kevin Warsh delivered a hawkish speech at the Jackson Hole symposium on Friday about returning inflation to the central bank's 2 per cent target.

Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said market participants are pricing in a 60 per cent probability of a rate hike at the Fed's September 16 meeting. IG market analyst Tony Sycamore told Reuters that one hike in isolation should not be a game changer for gold, but two or three might.

Vedika Narvekar of Anand Rathi Share and Stock Brokers noted a domestic factor. Prime Minister Narendra Modi, in an Instagram video from Kyrgyzstan, urged people to emphasise self-reliance and avoid unnecessary gold purchases, foreign holidays and weddings abroad. Narvekar said the comments were unlikely to move international prices but could weigh on domestic sentiment and jewellery demand in the near term.

Investors are awaiting the US ADP employment report and nonfarm payrolls data due later this week. The sources do not say where prices settled after Tuesday's session.