The price of gold continued its downward trend on Monday, with 24-carat gold falling by Rs 10 in early trading. As per the latest figures from the GoodReturns website, ten grams of 24-carat gold are now trading at Rs 75,640. Similarly, silver saw a decline of Rs 100, with one kilogram of the precious metal being sold for Rs 89,400.
Gold Prices Across India
The price of 22-carat gold also experienced a Rs 10 drop, bringing it to Rs 69,340 for ten grams. The trend is consistent across major metropolitan cities.
- Mumbai, Kolkata, Bengaluru, Chennai, and Hyderabad:
- 24-carat gold: Rs 75,640 per 10 grams
- 22-carat gold: Rs 69,340 per 10 grams
- Delhi:
- 24-carat gold: Rs 75,790 per 10 grams
- 22-carat gold: Rs 69,490 per 10 grams
While the decline in gold prices remains relatively modest, the consistency of these prices across multiple cities reflects a uniform trend in the domestic market.
Silver Prices See Larger Drop
Silver also witnessed a notable decline, falling Rs 100 per kilogram.
- Delhi, Mumbai, and Kolkata: Rs 89,400 per kilogram
- Chennai: Rs 98,900 per kilogram
The significant price disparity between Chennai and other cities for silver highlights regional variations that could be driven by local demand and transportation costs.
Global Gold Market Trends
On the international front, gold prices saw a minor recovery after last week’s substantial declines. Spot gold inched up by 0.4% to $2,571.11 per ounce as of 0041 GMT, rebounding slightly from a two-month low. However, the metal posted its steepest weekly decline in over three years last Friday, signalling ongoing volatility in the market.
The subdued recovery comes amid expectations that the US Federal Reserve may take a cautious approach towards cutting interest rates, which limits the appeal of gold as a non-yielding asset.
Other Precious Metals
The global market for other precious metals showed positive movement:
- Spot silver: Gained 0.6%, trading at $30.39 per ounce
- Platinum: Rose 0.6% to $944.57 per ounce
- Palladium: Climbed 1.7%, trading at $966.66 per ounce
These upward movements suggest investors may be diversifying their holdings in the wake of gold’s recent performance.
Factors Influencing Gold and Silver Prices
Several factors are contributing to the current trends in the precious metals market:
- US Federal Reserve Policies:
The pace of anticipated interest rate cuts in the United States has tempered the demand for gold. Higher interest rates increase the opportunity cost of holding gold, leading to decreased investor interest. - Geopolitical and Economic Developments:
While gold is traditionally seen as a safe-haven asset during times of uncertainty, recent global developments, including stabilising inflation and easing recession fears, have reduced its appeal. - Domestic Demand and Seasonal Trends:
In India, gold demand is typically driven by festive and wedding seasons. With the peak festive season behind us, demand may taper off, contributing to the decline in prices.
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- Strength of the US Dollar:
A stronger dollar often makes gold more expensive for holders of other currencies, which can suppress global demand.
Investment Outlook
Despite the recent dip in gold prices, experts advise a cautious approach for investors. The precious metal remains a long-term investment choice, particularly for those looking to hedge against inflation or economic uncertainty.
Silver, often considered a more volatile but affordable alternative to gold, may present opportunities for short-term gains as its industrial demand, particularly in electronics and renewable energy, continues to grow.
The modest decline in domestic gold prices, paired with a more significant drop in silver prices, reflects current global and local market dynamics. With international gold prices showing signs of stabilisation, Indian markets may witness subdued but steady trading in the coming days.
For investors, staying attuned to global trends, including US Federal Reserve policies and economic indicators, will be crucial in navigating the precious metals market. As always, diversification remains a key strategy in managing investment risks.
