Gold prices surged in the domestic market on Wednesday for the third time this week even as the BSE Sensex index fell over 400 points and the NSE opened deep in the red today. One gram of 22-carat gold will be available for Rs 4,690 as against Rs 4,675 on Tuesday, whereas one gram of 24-carat gold is available for Rs 5,116 as against Rs 5,110 yesterday.
In the international market, gold prices dipped on Wednesday, as the US dollar and Treasury yields rose after economic data indicated that the US Federal Reserve might carry on with its aggressive rate-hike ways.
Spot gold was down 0.3 per cent at $1,696.30 per ounce, as of 0127 GMT. Spot silver fell 0.7% to $17.92 per ounce, platinum was 0.7 per cent lower at $847.46 and palladium shed 1 per cent to $1,986.79.
|Gram||Price for 22-carat gold||Price for 24-carat gold|
|1 gram||Rs 4,690||Rs 5,116|
|10 grams||Rs 46,900||Rs 51,160|
Domestic gold prices have shown a surge this week even though most of the commodities in the non-agro segment saw a decline in the past few weeks due to a stronger dollar and slowdown fears. MCX gold October futures climbed 0.25 per cent on Monday and touched Rs 50,495 per 10 grams.
The gold prices on September 7 in major cities are as follows:
|City||22-carat gold||24-carat gold|
|Chennai||Rs 47,500||Rs 51,820|
|Mumbai||Rs 46,900||Rs 51,160|
|Delhi||Rs 47,050||Rs 51,320|
|Kolkata||Rs 46,900||Rs 51,160|
|Hyderabad||Rs 46,950||Rs 51,200|
|Bangalore||Rs 46,900||Rs 51,160|
In the past, gold prices have had an inverse relationship with volatility in the market, unlike other asset classes. Assets like bonds and stocks don’t like increased volatility in the market as that indicates greater uncertainty around cash flows and dividends. On the other hand, gold tends to benefit during periods of higher volatility.
At present, gold volatility is rising, and in the context of higher yields and a stronger US Dollar, it remains a headwind for gold prices in the near future, as per experts.
Spot gold was down 0.3 per cent at $1,696.30 per ounce, as of 0127 GMT. US gold futures were down 0.3 per cent at $1,708.30. The dollar index was up 0.2 per cent, which is very close to the two-decade peak, making gold more expensive for overseas buyers.
(With agency inputs)
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