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Gold prices continue to fall due to lack of demand

Gold prices continue to fall due to lack of demand

Gold prices continue to fall due to lack of demand
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By CNBC-TV18 Sept 12, 2019 11:57:51 AM IST (Updated)

Gold prices in India fell on Wednesday in absence of festive demand despite positive trends in global markets.

Gold prices in India fell on Wednesday in absence of festive demand despite positive trends in global markets. Global gold prices edged higher supported by concerns over the global economy and the US-China trade war. In New Delhi, gold prices declined by Rs 372 to Rs 38,975 per 10 grams, while silver prices tumbled Rs 1,150 to Rs 48,590 per kilogram, reported PTI.

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The spot gold rate in global markets was up 0.5 percent at $1,492.50 per ounce. Gold prices fell to their lowest since August 13 at $1,483.90 on Tuesday. US gold futures edged 0.1 percent higher to $1,500.50 an ounce.
Demand slowdown
"The festival demand has not picked up yet in the physical market due to higher gold prices," said Tapan Patel, senior commodities analyst at HDFC Securities.
"Prices are up very marginally, gold is still under pressure. We are at a month low around the $1,490 level because of improvement in risk appetite," Reuters quoted Capital Economics analyst Ross Strachan as saying.
Bottoming Price
"The fact that we are at the bottom end of the range over the past month or so is attracting some interest, but we are also seeing partial recovery in bond yields in recent days, which is a bearish factor for gold in the short term," Ross added.
Demand in domestic markets usually rises at the end of the year due to the wedding season as well as festivals such as Diwali and Dussehra, when buying gold is considered auspicious. India's August gold imports plunged 73 percent from a year ago due to a price rally and a hike in import duty, reported Reuters.
"Demand has been slowly improving," said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in Chennai. "But we need a bigger fall for normal demand during the festive season."
The Rupee Factor
The Indian rupee recovered from initial losses to close 5 paise up at 71.66 against the US dollar on Wednesday, extending gains for a fifth straight session on the back of firm domestic equities and Asian currencies like the Chinese yuan.
On Monday, gold prices for 99.9 percent purity had closed at Rs 39,347 per 10 gram and silver at Rs 49,740 per kilogram. The bullion market was closed on Tuesday on account of 'Muharram'.
(With inputs from agencies)
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