New Delhi, March 21 (IANS). Due to continuous profit booking and strengthening of the dollar, gold prices fell by about 5.89 percent this week.
On Friday, the last trading day of the week, MCX Gold April futures rose by 0.23 percent and reached Rs 1,44,825 per 10 grams, while MCX Silver May futures fell by 1.72 percent or Rs 3,990 to reach Rs 2,27,470 per kg.
According to India Bullion and Jewelers Association (IBJA), the price of gold of 999 purity stood at Rs 1,47,218 per 10 grams on Friday, which is much lower than Monday’s Rs 1,56,436. At the same time, the price of silver of 999 purity was Rs 2,32,364 per kg, which is more than Rs 16,000 less than Monday’s Rs 2,48,711.
According to analysts, due to the ongoing tension in the Middle East and mixed signals related to it, gold and silver may remain under pressure in the coming week. Earlier there was a rise in their prices due to the demand for safe haven, but now the confidence of investors has weakened due to fluctuations.
Israel’s attack on Iran’s South Pars gas field and Iran’s actions in response to it have increased oil and gas prices, threatening to increase global inflation.
On the other hand, the US Federal Reserve, Bank of Japan, Bank of Canada and Bank of England have shown a dovish stance, due to which interest rates are likely to rise or remain high. This puts pressure on precious metals like gold and silver.
MCX Gold is now approaching its lower support level. According to experts, the level of Rs 1,50,000 to Rs 1,52,000 is resistance, while strong support remains between Rs 1,35,000 to Rs 1,40,000.
Silver has also fallen sharply this week and has reached near the demand zone of Rs 2,20,000 to Rs 2,15,000. However, if purchasing increases, silver may again see recovery up to Rs 2,40,000.
At the same time, according to the data released by the Reserve Bank of India on Friday, India’s gold reserves increased by $ 664 million for the week ending March 13 and increased to $ 130.68 billion. However, India’s total foreign exchange reserves declined by $7.05 billion to $709.76 billion during the week ended March 13.
The decline follows an even sharper decline in the previous week ended March 6, when reserves fell by $11.68 billion to $716.81 billion from $728.49 billion.
The main reason for this decline is the intervention by the central bank in the currency market, where it sold dollars to support the rupee amid pressure on the rupee due to rising global oil prices and geopolitical tensions related to the Iran conflict.
Foreign currency assets, which form the largest part of reserves, declined by $7.678 billion to $555.568 billion during the reporting week.
These assets also reflect the impact of fluctuations in major global currencies such as the Euro, Pound and Yen against the US Dollar.
–IANS
DBP