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Gold hit a three-month low in spot trade in Zaveri Bazaar here on Saturday, after selling pressure pulled down bullions in global markets.
Standard gold (.995 purity) closed on Saturday with a decline of 1.6 per cent or Rs 440 to Rs 26,410 per 10 gm — the level not seen after December 1, 2014. In London, gold posted a daily loss of 2.65 per cent or $31 to settle at $1,169.2 an oz on Friday.
“The decline is sharper in India than overseas due to depreciation in the Indian currency. In global markets, however, the fall in gold price was attributable to appreciation in dollar index due to better than expected US job data,” said Ajay Kedia, managing director of Kedia Commodity, a city-based broking firm.
According to reports, the US’s total non-farm payroll employment increased by 295,000 in February and the unemployment rate edged down to 5.5 per cent from 5.7 per cent, which was significantly better than the forecast for the addition of 240,000 jobs and a 5.6-per cent unemployment rate.
Positive US payroll data helped the US dollar index improve against major global currencies. US dollar is currently trading at a fresh 11-year high against the euro at 1.0985, which continued to weigh on metals.
Gold sustained the psychological level of $1,200 an oz for almost three months after a speech by the European Central Bank (ECB) president Mario Draghi on the central bank's bond-purchasing programme. Draghi set a floor for bond purchases at the ECB's deposit rate of (-)0.2 per cent, following questions regarding to the extent to which the central bank will dabble with negative-yielding bonds.
In London, however, silver breached the psychological barrier of $16 to close on Friday at $15.96 an oz.
“In India, traders were expecting a cut in import duty in the Union Budget on February 28 to bolster gold demand in India. But, somehow, the Finance Minister Arun Jaitley chose not to cut import duty. Hence, selling pressure is likely to continue,” said an analyst.
