Representative image of gold jewellery.
Credit: iStock Photo
New Delhi: Gold prices climbed Rs 670 to Rs 1,32,200 per 10 grams in the national capital on Wednesday, as firm global trends and a steep fall in the rupee supported the safe-haven demand, according to the All India Sarafa Association.
On Tuesday, the precious metal of 99.9 per cent purity closed at Rs 1,31,530 per 10 grams.
Traders said the rupee's slide to an all-time low against the US dollar pushed up bullion prices.
However, silver snapped a six-day winning streak by declining Rs 460 to Rs 1,80,900 per kilogram (inclusive of all taxes), as per the association.
"Gold posted modest gains in the domestic markets, supported by a firm global trend and weakness in the Indian currency," Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.
On Wednesday, the rupee breached the 90-a-dollar level for the first time to settle at a fresh all-time low of 90.21 (provisional), down 25 paise from its previous close, amid sustained foreign fund outflows and higher crude oil prices.
In the international market, spot gold was trading marginally higher at $4,207.67 per ounce, while silver advanced to USD 58.47 per ounce. The white metal during the session went up by nearly 1 per cent to hit a record of $58.94 per ounce.
"The sharp decline in the rupee helped cushion domestic gold prices from the earlier correction in international markets.
"As global prices rebounded, the impact of the weaker rupee amplified the gains in the domestic market, resulting in a stronger upside compared to overseas levels," Gandhi said.
He added that dovish remarks from Federal Reserve officials have strengthened expectations for a 25 basis points rate cut at next week's FOMC meeting, creating headwinds for the US dollar while providing support for the bullion.
"Investors are awaiting the US ADP private-sector employment report later in the day and the ISM Services PMI, both of which will provide further insight into the economic outlook and potential policy direction and short-term trajectory for bullion prices," Gandhi noted.