Gold Price Update

Gold drops Rs 1,000 from all-time high

Gold price on Dec 03, fell by about Rs 1,000 in less than a week, primarily owing to the rupee's appreciation against the dollar. In the last three days, the rupee appreciated 2.62 per cent against the dollar due to huge inflows from foreign investors. This made gold imports cheaper. The moderation in international prices added to the fall in prices.

From an all-time high last Monday, standard gold prices fell 3.77 per cent (Rs 1,225) to Rs 31,275 per 10 gm in the Mumbai spot market on Saturday. While the local money market was closed on Saturday, gold fell due to a fall in international prices on concern on a fiscal cliff in the US.

The decline largely resulted from uncertainty on presidential elections in the US, the largest market for Indian gold jewellery and diamonds

Prithviraj Kothari of Riddhisidhi Bullion said, "Prices have corrected significantly in the last couple of days and these would hit the bottom at Rs 30,000-30,500 per 10 gm which, if it sustains, would draw buyers back to the market." Yesterday, there were 30,000 marriages in Mumbai alone. Across the country, too, the number of marriages recorded was high. Kothari said the demand for gold due to marriages would be sustained. He added there were five million marriages in the country during a year, and these kept the demand for gold high.

The gold price started into the year 2012 at US dollars 1,530 per ounce. Over the full year 2011 the price of gold had increased by more than 12% despite the two dips in September and November/ December.