Gold Price Update: Yellow Metal Declines by Rs 1,000, Now at Rs 98,400
Gold prices experienced a significant drop on Monday, falling by Rs 1,000 to settle at Rs 98,400 per 10 grams in the national capital. This decline is attributed to weak global market trends, as reported by the All India Sarafa Association. The price of 99.5% pure gold also decreased, closing at Rs 97,900 per 10 grams, down from Rs 98,900. The local bullion market had been closed on Friday due to a protest against a recent terror attack in Jammu and Kashmir.
Impact of Global Trends on Gold Prices
The recent decline in gold prices is largely influenced by easing tensions in US-China trade relations, which has led to increased investor confidence and a reduced demand for safe-haven assets like gold. Chintan Mehta, CEO of Abans Financial Services, noted that a stronger US dollar has also contributed to the downward pressure on gold prices. The situation intensified following China’s announcement that it would exempt certain US imports from its high tariffs, although formal trade negotiations remain uncertain. Additionally, US Federal Reserve officials have indicated that there is no immediate need for changes in monetary policy, which diminishes the appeal of gold as a non-yielding asset.
Despite the current downward trend, Mehta highlighted that rising geopolitical tensions could limit further declines in gold prices. He pointed to escalating risks of conflict, particularly between India and Pakistan, as factors that may drive investors back to gold as a safe haven. The volatility in gold prices was evident last week when they reached a peak of $3,500 per ounce before retreating below $3,300.
Market Reactions and Future Outlook
Last week, gold prices fluctuated significantly, driven by a mix of geopolitical and economic concerns. The initial surge in prices was fueled by strong demand for safe-haven assets amid rising tensions. However, optimism regarding potential trade negotiations between the US and China, along with mixed signals from US officials, led to profit-taking and a subsequent decline in prices. The International Monetary Fund (IMF) has also revised its global growth forecast for 2025 down to 2.8%, raising inflation expectations and keeping investors on edge.
Looking ahead, market participants will be closely monitoring statements from US Federal Reserve officials, updates on US-China trade discussions, and key economic data from the US, including PMI readings and durable goods orders. These factors are expected to play a crucial role in shaping the future trajectory of gold prices.
Silver Prices Also Decline
In addition to gold, silver prices also saw a sharp decline, dropping by Rs 1,400 to Rs 98,500 per kilogram on Monday. This decrease follows a previous close of Rs 99,900 per kilogram. In global markets, spot gold fell nearly 1% to $3,291.04 per ounce, influenced by optimism surrounding a potential trade agreement between China and the US, as well as signs of progress in peace talks regarding the Russia-Ukraine conflict. Jateen Trivedi, Vice President of Research at LKP Securities, noted that gold’s weakness is largely due to growing expectations of tariff settlements and peace negotiations.
As traders navigate this uncertain environment, they will be keeping a close eye on developments related to global tariffs and key upcoming US economic data, including manufacturing PMI, GDP figures, non-farm payrolls, and unemployment rates, all of which are likely to impact bullion prices in the near future.
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