The prices of gold rallied higher in the domestic market when the rupee fell from 64 to 66.80 per dollar, said Nitin Nachnani
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Mumbai: The prices of gold, which rallied higher in the domestic market during August amidst a sharp depreciation in the rupee has pared most of its gains over the past one month due to weak demand and a recovery in local currency. After touching a high of Rs 27,200 per 10 gram in the domestic market in August 2015, the gold prices have now dropped to around Rs 26,000 per 10 gram. While the medium to long-term outlook on gold remains bearish, bullion experts said that gold prices could see some near term support due to the upcoming festive demand.
“The prices of gold rallied higher in the domestic market when the rupee fell from 64 to 66.80 per dollar. However, it reversed most of its gains once the local currency stabilised and rallied higher against the dollar,” said Nitin Nachnani, senior manager, IFA Global.
Another factor that played against the yellow metal was the rise in dollar index in the global market following reports that the US Fed Reserve would increase rates by the end of this year.
“The US non farm payroll data released was below expectations. So most of the market participants now feel that the US Fed Reserve may not hike interest rate in its meeting scheduled at the end of this month. Moreover, the rupee is also enjoying good support at 64.90/65 level mark against the dollar. So the gold prices could see some support in the immediate future,” added Mr Nachnani.
( Source : deccan chronicle )
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