Gold prices fall by ₹220 to ₹60,807; silver down ₹532 on global cues

Gold prices on May 16 fell by ₹220 to ₹60,807 per 10 grams in futures trade as speculators reduced their positions.

On the Multi Commodity Exchange, gold contracts for June delivery traded lower by ₹220 or 0.36 per cent at ₹60,807 per 10 gram in a business turnover of 12,441 lots.

Analysts attributed the fall in gold prices to the trimming of positions by participants.

Domestic spot gold opened at ₹61,079 per 10 grams on Tuesday, and silver at ₹72,015 per kilogram both rates excluding GST, according to Mumbai-based industry body India Bullion and Jewellers Association (IBJA).

Globally, gold was trading 0.50 per cent lower at USD 2,012.50 per ounce in New York. 

Spot gold was down 0.5 per cent at $2,009.89 per ounce, while US gold futures fell 0.4 per cent to $2,014.20.

Several Fed policymakers on Monday signalled they see interest rates staying high, with Richmond Fed President Thomas Barkin saying he is not convinced inflation is on a steady decline back to the US central bank's 2 per cent target.

High interest rates dull non-yielding bullion's appeal, even though gold is considered a hedge against inflation and economic uncertainties.

The US Treasury Department said It still expects to be able to pay the US government's bills only through June 1 without a debt-limit increase.

Meanwhile, The rupee on Tuesday saw its first gain in four sessions as a slightly weaker dollar and improving economic data supported the local currency.

The rupee closed at 82.2050 against the U.S. dollar, up from 82.2950 in the previous session.

The rupee had dropped to a six-week low of 82.3725 on May 16.

The dollar, which paused its recent rally and slipped from five-week highs, seesawed on Tuesday amid worries over weak U.S. economic data and the country's debt ceiling.

The rupee's movement is mostly tied to global worries like U.S. debt ceiling, which is impacting the dollar index, said Jateen Trivedi, analyst at LKP Securities. Expect rupee to broadly trade between 81.80-82.40 levels, he added.