Gold Price Drops Rs 950, Silver Plunges Rs 4,500 - Weak Demand

New Delhi, Jul 29 (PTI) Gold prices tumbled by Rs 950 to Rs 71,050 per 10 grams in the local market here on Monday due to weak demand from jewellers.

According to the All India Sarafa Association, the precious metal of 99.9 per cent purity closed at Rs 72,000 per 10 grams in the previous session on Saturday.

Gold of 99.5 per cent purity also plunged Rs 1,650 to Rs 70,700 per 10 grams. On Saturday, it closed at Rs 72,350 per 10 grams.

Silver also declined Rs 4,500 to Rs 84,500 per kg on decreased offtake by coin makers and industrial units.

This marks the biggest single-day fall in silver prices in 2024. It ended at Rs 89,000 per kg in the previous session.

Traders said reduced demand from jewellers as well as retail buyers led to the fall in gold prices.

"Last week, Finance Minister Nirmala Sitharaman in the Budget announced a customs duty cut from 15 per cent to 6 per cent, weighing on the domestic front.

"Post the cut in import duty, gold premiums in India jumped to their highest level in a decade," Manav Modi, Senior Analyst of Commodity Research at Motilal Oswal Financial Services Ltd, said.

However, on the global front, Comex gold is trading at USD 2,438.50 per ounce, up by USD 10.60 per ounce.

US Federal Reserve policymakers got fresh evidence of progress on their battle against inflation, fuelling expectations they will use their meeting to signal interest rate cuts starting in September, Modi said.

Focus this week will be on Fed policy meeting, US Consumer confidence, factory orders and jobs market data, he added.

The US Fed meeting will start on Tuesday and conclude on Wednesday.

In addition, silver was marginally higher at USD 28.28 per ounce in New York.

"Gold has started the week in positive with prices in the international market moving above USD 2,400 in early trades, on renewed safe-haven buying due to possible escalation in the Middle East tensions with additional support from a steady dollar against major currencies.

"Also focus remains on the three key central bank meetings this week, starting with the Bank of Japan, US Federal Reserve, and Bank of England," Pranav Mer, Vice President, EBG - Commodity & Currency Research at JM Financial Services, said.