Gold recovers Rs 110 on jewellers' buying

Snapping its 3-day fall, gold prices recovered Rs 110 to Rs 26,840 per 10 grams at the bullion market today on emergence of buying by jewellers and retailers at prevailing levels to meet rising seasonal demand even as the metal weakened overseas. However, silver eased Rs 325 to Rs 35,250 per kg due to reduced offtake by industrial units and coin makers. Bullion traders said emergence of buying by jewellers and retailers at the existing levels to meet wedding season demand mainly led to recovery in gold prices.

They said, however, a weak global trend where gold held near its over 2-week lows after the US unemployment rate dropped to a 7-year low, bolstering the case for a Fed rate hike this month, capped the rise. Globally, gold dropped 0.4 percent to USD 1,117.89 an ounce in Singapore. In addition, a depreciating rupee against the dollar, making imports costlier, supported the upside in gold prices, they added.

In the forex market, the rupee was trading at a two-year low of 66.85 (intra-day). In the national capital, gold of 99.9 percent and 99.5 percent purity rebounded Rs 110 each to Rs 26,840 and Rs 26,690 per 10 grams, respectively. The precious metal had lost Rs 330 in the last three trading sessions.

Sovereign, however, held steady at Rs 22,300 per piece of eight grams in limited deals. On the other hand, silver ready fell Rs 325 to Rs 35,250 per kg while weekly delivery shot up by Rs 520 to Rs 35,450 per kg on speculative buying. Silver coins, however, ruled steady at Rs 51,000 for buying and Rs 52,000 for sale of 100 pieces.