Gold prices in the national capital saw a second consecutive day of declines on Friday, dropping Rs 500 to Rs 99,120 per 10 grams for 99.9% purity. This follows Thursday’s close of Rs 99,620 per 10 grams, according to the All India Sarafa Association.
Similarly, 99.5% purity gold also fell by Rs 500 to Rs 98,750 per 10 grams (inclusive of all taxes) on Friday, down from Rs 99,250 per 10 grams.
Factors Influencing the Decline
Several factors contributed to the fall in gold prices:
- Easing Global Trade Tensions: Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, noted that easing tariff-related concerns played a significant role. The US has secured a trade deal with Japan, and optimism surrounds potential agreements with the EU, India, Mexico, and Brazil. These developments reduce gold’s appeal as a safe haven.
- Rebound in US Dollar: A stronger US dollar makes gold more expensive for holders of other currencies, dampening demand.
- Waning Expectations for Multiple US Interest Rate Cuts: A robust US job market has led to reduced expectations for aggressive interest rate cuts by the US Federal Reserve, which typically supports gold prices.
International Market Performance
In international markets, spot gold fell by USD 20.72 (0.62%) to USD 3,347.94 per ounce. Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, highlighted that the expectations of tariff deals are reducing gold’s safe-haven appeal, keeping it volatile, especially at elevated levels.
Silver Prices Remain Stable
In contrast to gold, silver prices remained flat at Rs 1,15,000 per kilogram (inclusive of all taxes) in local markets. Globally, spot silver slipped slightly by 0.35% to USD 38.92 per ounce.
Looking Ahead
The market’s focus now shifts to the US Federal Reserve’s interest rate decision next week, which will be a crucial determinant for the direction of bullion prices.
