Chennai, July 6 The strengthening of the US dollar and the slight reduction in global recession concerns have resulted in a decline in gold prices, said an analyst with Geojit Financial Services.
"The recent decline in gold prices (5.4 per cent from an all-time high) can be attributed to a slight reduction in global recession concerns and the strengthening of the US dollar. Additionally, with the possibility of an interest rate hike in the US, this trend may persist," Anil R, a Research Analyst, said.
According to the data from the World Gold Council, Indian gold demand in CY2023 declined by 17 per cent in terms of volume, primarily due to higher prices.
"Consequently, we anticipate muted retail demand in the short term. It is challenging to determine the day-to-day impact of these factors on stock prices. However, we expect the demand to pick-up in India as the festive season commences," Anil added.
At Comex, gold prices consolidated within a range on Thursday, trading down by 0.09 per cent at $1,924 per ounce.
Gold August future contract at MCX is trading marginally up by 0.05 per cent at Rs 58,495 per 10 gm, said Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.
Comex gold prices came under pressure following strength in US Treasury yields and the dollar index on the back of hawkish commentary from Federal Reserve officials' last meeting minutes, Gandhi said.
"The minutes showed that a large majority of policymakers agreed that more tightening would likely be needed this year," he added.
In the domestic market, bullion is trading slightly higher as prices get support from a weaker Rupee, which has depreciated almost 0.60 per cent against the US dollar so far this week, he said.
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