Gold Prices Dip ₹500 Amid Weak Global Cues; Silver Holds Steady at ₹1 Lakh per Kg
New Delhi: Gold prices in the national capital witnessed a notable decline of ₹500 on Thursday, slipping to ₹98,500 per 10 grams, according to the All India Sarafa Association. This drop is attributed to weak global trends and easing safe-haven demand as investors await clearer signals from the U.S. Federal Reserve.
The yellow metal of 99.5% purity was quoted at ₹98,000 per 10 grams (inclusive of all taxes), marking a significant correction after a sustained rally earlier in the month. Market analysts believe this dip is temporary and largely driven by short-term market reactions.
“Gold prices continued to correct as easing tariff risks and a more cautious Federal Reserve dampened safe-haven demand,” said Chintan Mehta, CEO of Abans Financial Services.
Fed Policy Uncertainty Pressures Bullion
The minutes of the U.S. Federal Reserve’s May meeting, released earlier this week, show that policymakers are adopting a “wait-and-see” stance regarding interest rate cuts. While inflation remains above target, recent policy moves and economic uncertainties have led the Fed to pause further action until clearer indicators emerge.
The now-blocked reciprocal tariffs by the U.S. Court of International Trade have also reduced tariff-related risks, weakening investor appetite for gold as a hedge.
“The Fed’s cautious tone is prompting gold traders to reduce exposure in the near term,” added Mehta.
Global Gold Prices Ease
In the international market, spot gold prices declined by $17.94, or 0.54%, to $3,304.46 per ounce, reflecting the same cautious sentiment globally.
Kaynat Chainwala, AVP-Commodity Research at Kotak Securities, noted that investors are waiting for key U.S. economic indicators scheduled for release later in the day. These include preliminary GDP data, weekly jobless claims, and pending home sales.
“Markets are in a holding pattern. Today’s data will offer more clarity on the U.S. economy, which could influence gold’s next move,” Chainwala said.
Silver Stays Flat Despite Gold’s Fall
Unlike gold, silver prices remained unchanged in domestic markets, holding steady at ₹1,00,000 per kg. Analysts believe that silver is being supported by industrial demand, especially in green technologies, even as gold experiences a pullback.
Geopolitical Unrest Continues to Lend Support
Despite the current bearish undertone, some analysts point out that geopolitical tensions, especially the ongoing conflict between Israel and Hamas, continue to bolster the metal’s long-term appeal as a safe haven.
“While macroeconomic cues are pulling gold down in the short term, the Israel-Hamas conflict ensures that gold won’t lose its relevance anytime soon,” Mehta emphasized.
What to Expect Next
With both the Indian and global bullion markets on edge, traders are eyeing cues from the U.S. macroeconomic data, the Fed’s next steps, and geopolitical developments to chart gold’s near-term direction.
Key Takeaways:
- Gold dropped ₹500 to ₹98,500 per 10 grams in Delhi markets.
- Silver remained flat at ₹1,00,000 per kg.
- Global gold fell 0.54% to $3,304.46/oz.
- Fed’s cautious tone, reduced tariff risks weigh on gold prices.
- Ongoing Israel-Hamas tensions still support safe-haven demand.
- Traders await U.S. GDP, jobless claims, and housing data for further cues.