The bullion market in the national capital witnessed a strong rebound in the prices of precious metals on Monday. Driven by fresh buying from jewelers ahead of the upcoming wedding season and a record depreciation of the Rupee, gold and silver prices in the domestic market recorded a massive surge of nearly 3 percent.
Silver : The price of the white metal silver recorded a massive jump of ₹7,000, or 3.04 percent, reaching a level of ₹2,37,000 per kilogram (inclusive of all taxes). In the previous trading session on Friday, it had closed at ₹2,30,000 per kilogram.
Gold : The price of gold with 99.9 percent purity rose by ₹3,700, or 2.5 percent, to reach ₹1,51,500 per 10 grams (inclusive of all taxes). In the previous market session, the yellow metal had settled at ₹1,47,800 per 10 grams.
Key Drivers Of The Surge: Domestic Demand And Global Trends
Market experts and traders have primarily attributed this recovery to physical buying ahead of the wedding season and favorable global trends. According to Saumil Gandhi, Senior Analyst at HDFC Securities, buying at lower levels and a decline in US Treasury bond yields have improved the overall market sentiment for precious metals.
Internationally as well, metals displayed a bullish trend. Spot gold rose by $38.68 or approximately 1 percent to reach $4,531.67 per ounce, while silver climbed 1.35 percent to trade at $70.72 per ounce. Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, noted that spot gold has reached approximately $4,530 per ounce; however, volatility persists as traders continue to closely monitor the US dollar and oil prices.
Gold And Silver Strengthen Amidst Historic Decline In The Rupee
In the domestic market, gold and silver prices received additional support from the sharp depreciation of the Indian rupee. Against the dollar, the rupee breached the 95 mark for the first time, hitting a record low of 95.2350. The Reserve Bank of India (RBI) had restricted onshore long-dollar positions to curb speculative activity, a move that initially lent some strength to the rupee. However, due to robust corporate demand and elevated crude oil prices, the rupee was unable to sustain its gains. Saumil Gandhi clarified that the weakening rupee has provided additional support to domestic gold prices.
Caution Still Prevails In The Market
Despite this impressive rebound on Monday, the bullion market has faced significant losses this month (March). Since March 2, gold has tumbled by ₹21,300 (12.3%), while silver has witnessed a massive decline of ₹63,000 (21%). According to Gaurav Garg, a Research Analyst at the Lemon Markets Desk, the overall sentiment remains cautious despite the recent gains. In global markets, gold has witnessed a decline of approximately 16% this month—marking one of its steepest drops in decades.
