Silver jumps Rs 7,000, gold rises Rs 3,700 on wedding season demand

New Delhi: Precious metal prices rebounded by about 3 per cent in the national capital on Monday, with silver jumping by Rs 7,000 to Rs 2.37 lakh per kilogram, and gold advanced to Rs 1.51 lakh per 10 grams on the back of fresh buying by jewellers ahead of the wedding season.

According to the All India Sarafa Association, the white metal soared Rs 7,000, or 3.04 per cent, to Rs 2,37,000 per kg (inclusive of all taxes) from Friday's closing level of Rs 2,30,000 per kg.

Gold of 99.9 per cent purity climbed Rs 3,700, or 2.5 per cent, to Rs 1,51,500 per 10 grams (inclusive of all taxes). The yellow metal had settled at Rs 1,47,800 per 10 grams in the previous market session.

Traders attributed the recovery to physical buying ahead of the wedding season, along with supportive global trends.

Gold recovered on Monday, supported by dip-buying, while declining US Treasury bond yields improved overall sentiment in the precious metals market, Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

He added that a sharp reversal in the rupee further supported domestic precious metal prices.

The rupee initially strengthened after the Reserve Bank of India restricted onshore long dollar positions to curb speculative activity. Later, it reversed gains amid strong corporate demand and elevated oil prices.

The currency breached the 95-per-dollar mark for the first time and touched a record low of 95.2350 against the US dollar.

The weaker rupee provided additional support to domestic gold prices, Gandhi said.

Despite Monday's rebound, bullion has posted steep losses this month. Gold has dropped by Rs 21,300, or 12.3 per cent, since March 2, while silver plunged Rs 63,000, or 21 per cent.

In the international markets, spot gold gained USD 38.68, or nearly 1 per cent, to USD 4,531.67 per ounce, while silver was trading 1.35 per cent higher at USD 70.72 per ounce.

Spot gold rose to around USD 4,530 per ounce as it continues to trade in a choppy and volatile fashion, as traders monitor US dollar and oil prices, Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said.

In global markets, despite the current gains, the overall sentiment remains cautious as gold has seen a significant drop of about 16 per cent this month, marking one of its steepest declines in decades, Gaurav Garg, research analyst at Lemonn Markets Desk, said.