Bilateral volatility in gold and silver markets: Banks sell dollars in local highs

(Commercial Representative) Mumbai, May 12, 2020, Tuesday

The Mumbai gold and silver market witnessed two-way fluctuations. Profitable sell-offs in gold fell modestly after the initial correction but closed higher compared to yesterday while prices in silver closed lower. The rupee rose against major currencies in the currency market. The wind of improvement is also blowing in oil.

Gold, which had closed at Rs 205 per 10 grams excluding GST yesterday, rose to Rs 30 intra-day and finally closed at Rs 4. The price of gold rose from Rs 2.50 to Rs 4,005 and finally closed at Rs 4. Prices were quoted three per cent higher with GST. Silver. The price of one kg, which was Rs 800 yesterday without GST, has gone up to Rs 5,050 today and closed at Rs 2,005. GST prices were quoted three per cent higher.

Gold prices in the world market fell by ૭ 1,305 an ounce to ૬૯૪ 15 and were trading at ૬૯૯ 16 late in the evening. Silver traded at 16.50 an ounce, up from ૫ 16.50 an ounce. Platinum was trading at ૭૬૬ 20 an ounce, up from ૭૬ 20 an ounce, while palladium was trading at ૮૫ 181 an ounce. Gold is coming under pressure as equities markets are growing in various countries.

In the domestic currency market, the dollar fell by 3 paise to close at Rs 2.50 after remaining volatile. Intraday, the dollar was seen at Rs 4.5. The pound was down 21 paise at Rs 3.10 while the euro was down 5 paise at Rs 31.31. There was talk in the market that the local banks had sold dollars in the wake of the so-called RBI instruction.

Crude oil continues to improve. New York's main contract, light sweet crude, was up 5 percent at ૨૫ 2.7 a barrel and Brent crude was up 2.5 percent at 20.8. Saudi Arabia's daily production of crude oil will fall to 3 lakh barrels from June due to additional cuts.