Gold prices decline on Monday on profit booking

CHENNAI: Gold prices on Monday came down with traders booking gains after a strong run with the price rising above $2,000 per ounce last week, said experts.

"Gold prices edged lower on Monday, with spot gold prices at Comex were trading down by 0.80er cent at $1,959 per ounce. Gold April future contract at MCX was trading down by 0.75 per cent at Rs 58,820 per 10 grams by noon session," Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.

Gandhi said the prices of yellow metal extended loss as short-term traders lock profit after price rose above $2,000 per ounce last week.

Further, the sentiment was hurt after Federal Reserve Bank of St. Louis President James Bullard said that he raised his forecast for peak interest rates this year amid ongoing economic strength, based on an assumption that the banking sector strains will ease, Gandhi added.

"We expect gold prices continue to be influenced by various macro forces ranging from Federal Reserve interest rate hike expectations, lingering banking fears (recently banking-sector fears spread to Germany's Deutsche Bank), dollar weakness, and falling Treasury yields," Gandhi said.

According to Navneet Damani, Senior Vice President - Commodity Research at Motilal Oswal Financial Services, the fears regarding global banking crisis kept safe haven demand high, however, bailout measures and reports regarding First Citizens BancShares Inc possibly acquiring Silicon Valley Bank, calmed market nerves a bit.

Damani said the US and European officials warned over the weekend that banking sector was being closely monitored for any signs of a potential credit crunch.

Physical gold dealers in India were forced to offer the steepest discounts in more than a year to lure buyers put off by a record surge in local prices last week, while the banking crisis fuelled steady demand in top buyer China.

Broader trend on COMEX could be in the range of $1,950-$1,990 and on domestic front prices could hover in the range of Rs 58,800 - Rs 59,500 could be expected, Damani remarked.