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Gold prices fell for the second straight session, declining ₹700 to ₹1.48 lakh per 10 grams in the national capital on Wednesday, as subdued local demand and weak global trend weighed on the precious metal.
The yellow metal of 99.9 per cent purity fell to a one-week low, depreciating ₹700 to ₹1,48,900 per 10 grams, inclusive of all taxes, from Tuesday's closing level of ₹1,49,600, according to local traders.
It was quoted at ₹1,48,600 per 10 grams on September 29.
"Gold prices declined in the domestic market on Wednesday amid weak global cues and subdued retail demand," said Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities.
A rebound in crude oil amid renewed concerns over supply disruptions triggered by West Asia tensions also added to the dip in the precious metal prices, he added.
However, depreciation in the rupee kept a lid on the precious metal's upside, analysts said.
The rupee slumped 43 paise to close at 96.78 (provisional) against the US dollar on Wednesday.
Silver, meanwhile, remained unchanged for the third consecutive session, at ₹2.27 lakh per kilogram, traders said.
In the international markets, spot gold fell $47.42, or 1.14 per cent, to $4,116.55 per ounce, while silver dropped 2.26 per cent, to hit nearly a three-month low, to $59.97 an ounce.
The white metal was last around these levels on July 9, when it traded at $59.96 per ounce.
Gold remained under pressure, hovering at $4,120 per ounce, while silver is holding around $60, in global trade as investors await the meeting minutes from the US Federal Reserve, said Akshat Siddhant, Lead Quant Analyst at investment platform Mudrex.
The minutes could provide cues on the Fed's interest rate outlook.
A stronger dollar, which is near an 18-month high, is also limiting the upside in gold as December rate hike odds remain at 70 per cent, he added.
Adding to the rate backdrop, the Reserve Bank of India raised its benchmark interest rate by 25 basis points (bps) to 5.50 per cent, its first increase in nearly four years, and signalled that further hikes could follow as rising inflation and a weakening currency prompt a policy pivot.
According to Radhika Piplani, Chief Economist at Motilal Oswal Financial Services Ltd, the RBI has also shifted its policy stance from neutral to 'calibrated tightening', signalling an intent to tighten both banking system liquidity and policy rates to contain inflation, she said, adding that they expect another 75 bps of tightening in this cycle, taking the repo rate to 6.25 per cent.
"This includes a 25 bps hike in December, which market participants have already largely priced in," Piplani added.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
