Domestic gold prices eased for a second straight day on Tuesday tracking a one-week low in the global benchmark.
Domestic gold prices continued to decline for a second straight day on Tuesday, tracking a one-week low in the global benchmark, as investors awaited the outcome of a key RBI meeting due on Wednesday. However, weakness in domestic equities — which boosts the appeal of precious metals as a safety bet — limited the downside.
MCX gold August futures fell by as much as Rs 189 or 0.4 percent to Rs 50,681 per 10 grams. Silver followed suit, with the white metal's July futures dropping by Rs 757 or 1.2 percent to Rs 61,542 per kilogram.
Indian equity benchmarks fell more than one percent amid broad-based weakness, and were on track to close lower for the third session in a row.
The rupee weakened to as low as 77.72 against the US dollar as the prospect of aggressive rate hikes supported the greenback as well as Treasury yields.
The dollar Index — which gauges strength in the greenback against six peers — gained as much as 0.4 percent.
One can expect gold to remain rangebound near $1,850 per ounce with a strong dollar exerting pressure on prices, according to Ravindra Rao, VP-Head Commodity Research at Kotak Securities.
Meanwhile, India's gold imports in May registered a 667 percent surge on a year-on-year basis to 101 tonnes. Lower prices, weddings and the Akshaya Tritiya festival boosted the demand for the precious metal.