Gold declines Rs 250; silver tumbles by Rs 1,700

New Delhi, Sep 02: Gold prices declined by Rs 250 to Rs 74,100 per 10 grams in the national capital on Monday due to tepid demand from local jewellers and retailers.

The precious metal of 99.9 per cent purity had closed at Rs 74,350 per 10 grams in the previous session on Friday.

Silver also tumbled by Rs 1,700 to Rs 85,500 per kg due to reduced offtake by industrial units and coin makers, according to the All India Sarafa Association.

Meanwhile, gold of 99.5 per cent purity also fell by Rs 250 to Rs 73,750 per 10 grams.

Traders attributed the fall in gold prices to subdued demand from local jewellers and stockists.

Globally, Comex gold was trading higher at USD 2,531.10 per ounce.

"Gold prices had surged to USD 2,564 per ounce, driven by a weaker dollar and safe-haven demand amid rising geopolitical tensions in the Middle East," Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, said.

Further, strong consumer spending, easing inflation, and better GDP growth in the US reduced expectations of more aggressive Federal Reserve easing, Chainwala added.

In the Asian trading hours, silver prices fell by 0.52 per cent to USD 28.99 per ounce.

Focus during the week will be on the manufacturing/ services PMI data from across regions, and the US Non-Farm Payroll/ unemployment data on Friday which will provide insights into the economic strength of the US economy, Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said.

According to Angel One's Prathamesh Mallya, DVP- Research of Non-Agri Commodities and Currencies, gold demand in key markets like India is expected to rise in the coming months, limiting the downside in gold prices.