Dollar rises, gold suffers

Gold’s sheen may a be a bit off this week due to the strengthening of dollar and fall in crude oil prices.

According to experts, the yellow metal will keep low profile this week.

Investment funds are also invariably shifting towards other asset classes including equity, currency and bonds.

Market analysts said the US Federal Reserve would either keep interest rates unchanged or revise them upwards.

Therefore, fundamentals continue to weaken in the valuable asset class.

The price of the yellow metal is expected to slump to $852 an ounce (oz) in London. But it is unlikely to provide any relief to the Indian consumers as the rupee is depreciating against the dollar.

Since the peak of below 40, the rupee has depreciated by about 7-8 per cent, while gold has fallen by above 13 per cent.

Gold had reached $1,033.90 on March 17, the highest-ever price, as the euro and crude oil set previous records.

Surprisingly, the domestic demand has hardly witnessed any major impact of the price rise or the fall because of auspicious days and seasonal buying on occasions like weddings and festivals.

This week, standard gold slumped by 4.65 per cent to Rs 12,205 per 10 grams, while pure gold nosedived by 4.67 per cent to Rs 12,260 per 10 grams in Mumbai. In London, the yellow metal fell by 4.50 per cent to $885.75 an ounce.