On Friday, the price of gold fell by Rs 200 to Rs 39,470 per 10 g in the two-and-a-half-hour low in Delhi sarafa market due to lack of demand from jewellery buyers.
The price of silver fell too, by Rs 985 to Rs 45,850 per kg due to lower industrial offtake, which is a five-week low. The prices of both the precious metals have registered a decline for the fourth consecutive day.
The price of gold in foreign markets remained almost unchanged today. Gold spot fell by $ 0.40 to $ 1,468.15 an ounce. However, the expectation of a rise in the demand for gold in the US in December made the price rise by $ 2.10 to $ 1,468.50 an ounce.
Market analysts said the yellow metal was under pressure on hopes of a trade war between the US and China. Due to this, it has had the biggest weekly decline of two-and-a-half years in the current week. Officials had said on Thursday that the US and China could withdraw customs cuts after the first phase of the settlement.
The silver spot price in the international market was $ 0.10, at $ 16.97 an ounce.
In the local market, the gold standard fell by Rs 200 to Rs 39,470 per 10 g, the lowest level since 22 October. Sona Bitur (guinea) became equally weak and sold at Rs 39,300 per 10 g. Sovereign remained unchanged at Rs 30,300 per piece of 8 g.
The silver spot price fell by Rs 985 to Rs 45,850 per kg, the lowest level since October 01, due to weak industrial demand for silver. Silver futures dipped by Rs 1,379 to Rs 44,280 per kg. Coin buying and selling remained stable at Rs 920 and Rs 930 per unit respectively.
Current prices of gold, silver
Gold standard per 10 g: Rs 39,470
Guinea per 10 g: 39,300
Silverspot per kg: Rs 45,850
Silver futures per kg: Rs 44,280
Coin buying per unit: Rs 920
Coin selling per unit: Rs 930
Sovereign per 8 g: Rs 30,300
Why these prices fluctuate
Like for most commodities, the price of gold is driven by supply and demand, including speculative demand. However, unlike most other commodities, saving and disposal play larger roles in affecting its price than its consumption. Most of the gold ever mined still exists in an accessible form such as bullion and mass-produced jewellery, with little value over its fine weight — so it is near as liquid as bullion, and can come back onto the gold market.
At the end of 2006, it was estimated that all the gold ever mined totalled 1,58,000 tonnes. Investor Warren Buffett has said that the total amount of gold in the world that is above ground could fit into a cube with sides of just 20 metres (66 ft) (which is roughly consistent with 158,000 tonnes based on the specific gravity of 19.3).
With inputs from the World Gold Council