Gold retreats from record highs; declines Rs 606 to Rs 1,07,122/10 g on profit-booking

New Delhi: Gold prices retreated from record highs by declining Rs 606 to Rs 1,07,122 per 10 grams in the domestic futures market on Monday, as investors booked profits in tandem with a weak trend in the international markets.

On the Multi Commodity Exchange (MCX), gold futures for October delivery declined Rs 606 or 0.56 per cent to Rs 1,07,122 per 10 grams. It had surged to a lifetime high of Rs 1,07,807 per 10 grams on Friday. Similarly, the precious metal futures for December delivery slipped Rs 612 to Rs 1,08,176 per 10 grams.

Silver too witnessed a pullback after touching a fresh peak last week.

The white metal futures for December delivery dropped Rs 977 or 0.78 per cent to trade at Rs 1,23,720 per kilogram. Silver had scaled a record Rs 1,26,300 per kg on September 3.

On Saturday, bullion prices in the spot markets rose to hit fresh peaks in the national capital.

Gold of 99.9 per cent and 99.5 per cent advanced Rs 900 each to hit a fresh high of Rs 1,07,870 per 10 grams and Rs 1,07,000 per 10 grams, respectively, according to the All India Sarafa Association.

Silver prices jumped Rs 1,400 to hit a fresh peak of Rs 1,27,000 per kilogram in New Delhi.

In the overseas markets on Monday, Comex gold futures for December delivery fell 0.68 per cent to USD 3,628.35 per ounce after scaling a record USD 3,655.50 per ounce in the previous session. Spot gold eased to USD 3,584.40 per ounce in the global markets.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, said, "China's central bank, the People’s Bank of China (PBoC), increased its gold holdings for a 10th straight month in August as it continues to diversify its reserves away from the US dollar." The PBoC on Sunday said it has added purchases of gold to its reserves in August, extending it into a 10th consecutive month, as per the official data.

China's gold reserves stood at 74.02 million fine troy ounces at the end of August, up from 73.96 million at the end of July.

The gold reserves were valued at USD 253.84 billion as compared to USD 243.99 billion at the end of the previous month, according to the data.

Trivedi noted that the US administration on Friday moved to exempt gold, along with some other metals, from its country-based tariffs, a step expected to lend further support to demand.

Also, Comex silver futures slipped 0.7 per cent to trade at USD 41.26 per ounce in the international markets. Spot silver eased by 0.88 per cent to USD 40.64 per ounce.

Last week, gold and silver continued their upward momentum, with the precious metal touching a fresh record high and silver scaling a 14-year peak in global markets.

Rahul Kalantri, VP Commodities, Mehta Equities, said disappointing US job numbers have raised expectations of an interest rate cut by the Federal Reserve, bolstering safe-haven demand for the bullion prices.

"Growing global uncertainties and a weakening dollar index further fuelled safe-haven demand, while a weaker rupee lent additional support to gold and silver in domestic markets," Kalantri added.

According to the World Gold Council, central banks' purchases of gold globally have slowed as prices surged, although geopolitical risks are likely to sustain demand.

On the market outlook, global investment bank Goldman Sachs said in a note that gold could rally towards USD 5,000 per ounce if the Fed's independence comes under threat and investors move even a small share of holdings from Treasuries to bullion.