Gold prices today fell in special Diwali Muhurat trading. Gold rates declined Rs 210 to Rs 32,400 per 10 grams while silver prices also dropped. Silver rates fell by Rs 300 to Rs 39,000 per kg. Traders attributed the price fall to lackluster activity in the bullion market. Jewellers and retailers made token purchases to mark the auspicious occasion of ‘Diwali’ and beginning of Hindu Samvat year 2075. In Delhi, prices of gold of 99.9% and 99.5% purity traded lower by Rs 210 each to Rs 32,400 and Rs 32,250 per 10 grams respectively. Sovereign too weakened by Rs 100 to Rs 24,800 per piece of eight grams.
Gold prices had weakened by Rs 80 on Tuesday.
In global markets, gold prices however advanced as US mid-term elections delivered a split Congress and pressured the dollar. Market participants will now keep a close eye on a two-day Fed meeting starting later in the day for clues on future interest rate hikes. Spot gold was up 0.5% to $1,232.86 per ounce at 1203 GMT, while US gold futures climbed 0.7% to $1,234.30 an ounce.
The dollar index, which measures the price of greenback against a basket of other currencies, fell more than half a percent, making bullion more attractive for holders of other currencies
Democrats won control of the US House of Representatives, giving them the opportunity to block President Donald Trump’s push for a further round of tax cuts and deregulation – measures that have turbo-charged the US economy, stock markets and the dollar, and have kept the Fed on a policy-tightening path.
“This will presumably put paid to any further tax cuts, which means in the longer term that the Fed will need to implement fewer rate hikes, which per se will have a negative impact on the U.S. dollar,” Commerzbank analysts said in a note.
“President Trump may instead focus more on foreign policy, which is likely to generate additional uncertainty. Gold would profit long-term from both factors.”
Investors often turn to gold as insurance at times of financial and political uncertainty.