Gold prices on Tuesday slipped by Rs 500 to Rs 1,00,420 per 10 grams in the national capital. This drop came despite a firm trend in the international markets, signalling a complex interplay of global and domestic factors impacting precious metal rates.
Previously, gold of 99.9 per cent purity was priced at Rs 1,00,920 per 10 grams. In contrast, gold of 99.5 per cent purity also witnessed a fall of Rs 450, trading at Rs 1,00,050 per 10 grams. It had closed at Rs 1,00,500 in the last session, including all applicable taxes.
Commenting on the price drop, Chintan Mehta, CEO of Abans Financial Services, noted: “Gold price cools down, as the peace talks between President Donald Trump and President Zelenskyy brought some hope for ending the war in Ukraine during a meeting at the White House, with European and NATO leaders also in attendance.” The renewed diplomatic efforts have given global markets a reason for cautious optimism, contributing to a shift in investment flows from safe-haven assets like gold.
Praveen Singh, Head of Commodities and Currencies at Mirae Asset Sharekhan, added another layer of context: “Weakness in the USD/INR pair on the Indian government tweaking GST rules is weighing on the domestic gold prices.” The changes in India’s tax policies and the subsequent fluctuation in currency value appear to be influencing domestic bullion prices, compounding the effects of international developments.
Silver followed a similar downward trend, with prices falling sharply by Rs 1,000 to settle at Rs 1,14,000 per kilogram on Tuesday. In the prior session, the white metal had closed at Rs 1,15,000 per kg.
Globally, however, spot gold witnessed a modest gain of 0.15 per cent, reaching USD 3,337.92 per ounce in New York trading. Analysts suggest that this uptick may be short-lived, as investors remain focused on upcoming macroeconomic signals.
“Gold prices declined below USD 3,380 per ounce as investors turned their attention towards US Federal Reserve Chair Jerome Powell’s forthcoming statements at the Jackson Hole Symposium as well as the minutes from the Fed’s most recent meeting,” explained Renisha Chainani, Head – Research at Augmont. Market participants are expected to scrutinize Powell’s comments for clues on the future path of interest rates and monetary policy in the world’s largest economy.
Spot silver also showed a minor rise internationally, trading at USD 38.09 per ounce, up by 0.19 per cent. Still, the marginal increase abroad could not offset the domestic decline.
Looking ahead, traders and investors are keeping an eye on crucial US housing market data expected later in the day. “On the macro front, US housing market data, which include building permits and housing starts, will be released later in the day, which may provide volatility in US dollar and gold prices during the session,” said Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities.
Overall, the drop in gold and silver prices reflects a blend of global diplomatic developments, domestic policy changes, and anticipation of upcoming economic data, all combining to create an uncertain short-term outlook for precious metals.
