The Indian crude basket has also slipped to $100.06 which is lower than even the last fortnights average price of $101.21. Thursday marks the sixth consecutive day in global markets when gold prices have dipped as large investors cashed out of their holding of the metal, nearly erasing the brief rally that followed Aprils plunge.
In Mumbai, the countrys bullion hub, standard gold fell from Rs 26,760 per 10 grams to Rs 26,210. Pure gold declined from Rs 26,900 to Rs 26,350 per 10 grams. Strong equities markets have also started luring investments away from the safe-haven yellow metal.
As global risk appetite improves, analysts said investors are likely seeking out assets with higher returns and also selling gold to free up investment capital. The decline in inflation to 4.89 per cent has also dented golds allure as a store of value and an inflation hedge.
A report by Aditya Birla Money notes with the speculation in commodities broken, part of the speculative money from commodities (could) shift to equities... A proportion of the same could pour into emerging markets with India benefiting....
The weakness in oil and gold prices will ease the pressure on the current account deficit projected at 4.7 per cent for the year by the Prime Ministers Economic Advisory Council. It has also made the management of fiscal deficit easier as the under-recovery on diesel has declined toRs3.73 per litre from Rs3.80perlitrein the previous fortnight.
Gold imports down, demand robust
NEW DELHI: Gold import and demand in India, the worlds largest consumer, stood at 228 tonnes and 202.1 tonnes, respectively, in the corresponding period last year, the World Gold Council (WGC) said on Thursday.
The demand for the precious metal will continue to be robust in the coming months though the government has imposed some curbs on imports, the WGC said in its report, while cautioning any further supply controls will activate unauthorised channels.
Good rabi crop and lower gold prices during February led to higher jewellery demand, the WGC said, adding that the rise in gold import duty could not negate it.