The gold prices have slid by Rs 40 to settle at Rs 31,950 per ten grams in India at the bullion market today. The reason behind the decline in the price of gold is the slackened demand for the yellow metal from local jewelers in spite of a rise in its price in the international market.
In the international market, the prices of gold were up slightly compared to the previous close and it stood at $1,293.83 per ounce.
The U.S. gold futures for June delivery was up by 0.18% at $1,291.70 per ounce.
Local traders believe that the easing demand from local jewelers and retailers at the existing levels is likely to put pressure on the prices of gold in the domestic market but a firm trend in the overseas market led to the fall in its prices.
There is a huge demand for gold in India. The yellow metal is a must during most of the wedding ceremonies and other celebrations.
In its recent study, the World Gold Council revealed that the demand for gold in India surged up during 2017 and it grew by 9.1 percent to reach 727 tonnes from 666 tonnes during the previous year of 2016.
The total jewelry demand in the country during last year was up by 12 percent to settle at 562.7 tonnes as compared to 504.5 tonnes in 2016, the report stated.
Investing in gold is considered as safe and reliable in India. People in India consider gold as the best asset which comes in handy during an emergency situation and hence the demand for gold is more across all the classes of people in the country.
The declining value of rupee against dollar has also led to the downfall in the rate of gold in India. The rupee is close to reaching 68 levels per US dollar on Friday. After posting strong gains in the year 2017, against the US dollar, the value of rupee has fallen sharply against the greenback this year. The rupee is down by about 6 percent so far this year against the US dollar.