NEW DELHI: After a relentless five-day rally, gold prices took a sharp hit on Friday, tumbling Rs1,350 per 10 grams to Rs93,000 in the national capital. The sudden decline comes amid a weak trend in international markets, triggering profit booking among traders, according to the All India Sarafa Association.
On Thursday, the gold price had surged to an all-time high of Rs94,350 per 10 grams, fueled by strong safe-haven demand and global economic uncertainties. However, as the dollar firmed up and bond yields gained traction, gold’s momentum came to a halt, leading to a broad-based correction. Gold of 99.5 per cent purity also mirrored the trend, falling by Rs1,350 to Rs92,550 per 10 grams.
Market analysts believe the dip in gold price was long overdue after the recent surge, with investors looking to lock in gains. The international gold price saw a decline as the US Federal Reserve’s policy stance and positive economic data eased recession fears, dampening gold’s appeal as a safe-haven asset.
Strong dollar
A stronger US dollar and rising Treasury yields have also exerted downward pressure on bullion prices globally.
Silver, too, faced a steep drop, plunging Rs4,000 to Rs99,000 per kg amid softening industrial demand. The fall comes after the white metal recently crossed the Rs1 lakh per kg mark, driven by optimism over industrial growth and inflationary concerns.
However, with a slowdown in manufacturing activity in key markets, silver prices are now facing some resistance. Despite the pullback, experts suggest that the ongoing geopolitical tensions, inflationary pressures, and central bank gold purchases will continue to support gold prices in the medium to long term. “Volatility is expected to persist as markets remain sensitive to macroeconomic developments,” said a bullion trader. Investors are advised to keep a close watch on global cues before making fresh entries into the market.
