The Hindu Business Line : Bullion prices in sync with weak global markets

Mumbai, Aug. 17 Traders in the local bullion market are advising a bit more of a wait-and-watch period for the eager bullion investors. Prices in the domestic market are expected to plunge further due to continued bearish trend in the international markets.

In the domestic spot market, gold was quoted at Rs 8,760 per 10 gm, while silver was quoted at Rs 16,800 per kg.

Investors can see Rs 8,500 per 10 gm a good buying level for gold, while Rs 16,800 per kg for silver, said Mr Suresh Hundia, President of the Bombay Bullion Association.

Bullion prices internationally were in sync with the weakness in the global financial markets.

While gold nose-dived to as low as $646 an ounce, silver went down to a low of $11.50 an ounce in the London spot market on Thursday. However, prices recovered thereafter with gold quoting at $660.60 an ounce and silver quoting at $11.90 an ounce in the London spot market.

A continued weakness in the financial markets is causing an overall liquidity crunch, which is impacting the precious metals complex, said Mr Prithviraj Kothari, Director of Riddisiddhi Bullions Ltd. However, there has not been much benefit in the domestic prices, despite the sharp fall in the international prices on account of rupee depreciation, he added. Rupee depreciated to an intra-day low of Rs 41.70 during the day from Thursday’s close of Rs 41.36.

In the event of weakness in equity market continues, rupee can be seen depreciating further which will give stability to the domestic bullion prices, said Mr Vicky Sajnani, bullion analyst of JM Financial. Generally, when price volatility of a commodity is within a certain price range, demand is higher, he said.