Gold futures decline Rs 145 on profit-booking, global cues

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Gold prices fell by Rs 145 to Rs 32,000 per ten grams in futures trade on Friday as speculators went for profit-booking at prevailing levels amid a weak trend overseas.

In futures trade at the Multi Commodity Exchange, gold to be delivered in far-month February next year fell by Rs 145, or 0.45 per cent, to trade at Rs 32,000 per 10 grams in a business turnover of 75 lots.

The yellow metal for delivery in December, too, shed Rs 110, or 0.34 per cent at Rs 31,782 per 10 grams with a business volume of 434 lots.

Analysts attributed the fall in gold futures to profit-booking by traders at current level and a weak trend in precious metals overseas.

Globally, gold shed 0.03 per cent to USD 1,233.50 an ounce in Singapore on Friday.

Meanwhile, Global gold demand rose marginally by just one per cent during the third quarter of this year to 964 tonne mainly on account of large outflows in gold-backed exchange-traded funds (ETFs), the World Gold Council (WGC) said in a report Thursday.

The overall demand in the third quarter of 2017 stood at 958 tonne, according to WGC’s ‘Q3 Gold Demand Trends’ report.

Electronically traded fund (ETF) outflows reached 103 tonne in the third quarter of this year, the first outflow since the fourth quarter of 2016, it said.

North America accounted for 73 per cent of the outflow, fuelled by ‘risk-on sentiment’ (when investors give up safety for returns) amid a strong dollar and price-driven momentum.

However, bar and coins saw a growth of 28 per cent at 298.1 tonne against in the September quarter this year from 233 tonne in the year-ago period as investors took advantage of the price dip.

The report further noted that stock market volatility and currency weakness boosted demand in many emerging markets as well as in China, the world’s largest bar and coin market, as it witnessed 25 per cent growth at 86 tonne from last year.

Iranian demand hit a five-and-a-half year high at 21 tonne, the report added.

Similarly, jewellery demand also saw six per cent growth to 535.7 tonne compared to 505.8 tonne in the same period last year.

Lower gold prices during July and August encouraged bargain hunting among price-sensitive consumers.

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