Reversal is because of strengthening rupee, subdued demand, and lack of reasons for bulls to continue positions and speculation of reduction in import duty.
Gold prices seem to be reversing from its all-time high seen in third week of last month.
Reversal is because of strengthening rupee, subdued demand, and lack of reasons for bulls to continue positions and speculation of reduction in import duty.
Analysts don’t see much reasons for sharp fall, though the prices have fallen over 5 per cent in a fortnight.
Ahammed MP, chairman, Malabar Gold & Diamond said, “Strengthening indian rupee had aided to fall in prices as there is no drastic changes in supply demand situation.
"Price is still high which keeps buyers away even during festival seasons.”
A strong buzz of cut in import duty was also impacting spot and gold futures prices.
Standard Gold price which closed Rs 33725 on February 20 has closed Rs 31,975 per 10 gram in Mumbai spot market.
"In just 15 days price has reversed from bullish to bearish, gold prices on MCX futures dropped nearly 2230 Rs i.e. 6.55% down from 20th Feb high of 34031 missing its all time high of 34034 in 2013 as rupee gained more than 2% as indo-Pak and us China trade tensions eased,” said Ajay Kedia, director, Kedia commodities.
He also said volumes and open interest in April contract fell sharply after last month’s high as bulls booked profit.
There is also a buzz in the market that the comprehensive gold policy is ready and center may announce it soon.
Debajit Saha, India and south asia head of GFMS Thomson Reuters said that, Demand for gold has seen some pick up in last two days on lower prices but overall demand in the current quarter is low or subdued.
Photograph: Reuters
