in Mumbai’s physical market on Friday fell 3.1 per cent or Rs 1,351 to close at Rs 41,848 per 10 gram. Friday’s fall in per cent terms is worst after November 2015 and, in absolute terms, the worst after August 2013. Silver prices fell Rs 2,255 to close 5 per cent lower at Rs 43,085 per kg on Friday.
Market experts said fall in precious metals continued even on Friday as there was no fresh buying because the yellow metal is still quite high, whereas retail demand is absent.
Shekhar Bhandari, president & business head for global transaction banking and precious metals, Kotak Mahindra Bank, said, “The COVID-19 pandemic and oil collapse have sent treasury yields to record lows, equity markets
to bear phase and gold trade at a seven-year high. Gold demand is quite dull, which is in line with the fall in discretionary demand, across the country. High prices and volatility in prices of gold are keeping buyers away.”
He was, however, optimistic about the demand when markets
settle down. He added that, “Demand may recover next month, if fears subside. Those waiting to buy gold may buy when prices stabilise or at lower levels.”
As of now, the fact that demand for gold was almost gone was reflected in the cost of import and market price.
During Friday’s closing rate of Rs 41,849 per 10 gram, gold was still Rs 400 lower than the cost of import. During the day, discount quoted was around Rs 900 to Rs 1,000 per 10 gram.
Even imports have fallen significantly since the last few days because of volatile prices.