Gold Prices Drop Below ₹80,000 Amid Weak Global Trends

Gold (99.9% purity) declined by ₹1,000, now priced at ₹79,400 per 10 grams (previously ₹80,400). Gold (99.5% purity) dropped to ₹79,000 per 10 grams, compared to ₹80,000 on Friday. Silver fell significantly by ₹1,600, priced at ₹91,700 per kg, down from ₹93,300.

Profit booking from last week’s surge in gold prices led to the unwinding of long positions as traders capitalized on gains. Reports of a potential ceasefire between Israel and Lebanon’s Hezbollah reduced the “war premium” on gold.

In global markets, Comex gold futures fell by $40.80 or 1.49%, trading at $2,696.40 per ounce. In the Asian market, silver prices declined by 1.7%, trading at $31.24 per ounce. Focus remains on the US Federal Reserve’s Federal Open Market Committee (FOMC) meeting minutes and inflation data from the Personal Consumption Expenditures (PCE) price index.

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Jateen Trivedi, VP Research Analyst at LKP Securities, said, “Gold saw a significant decline as geopolitical tensions did not escalate over the weekend. The rally lost momentum, leading to profit booking.” Saumil Gandhi, Senior Analyst at HDFC Securities, noted, “The yellow metal fell below $2,700 per ounce after a nearly 6% rally last week driven by safe-haven demand during the Russia-Ukraine crisis.”

In the futures market, gold (December MCX Futures) dropped by ₹1,071 (1.38%), trading at ₹76,545 per 10 grams, compared to the previous close of ₹77,616. Silver (December MCX Futures) fell by ₹1,468 (1.62%), trading at ₹89,300 per kg, down from ₹90,768.

Last week, gold surged past the $2,700 mark due to escalating tensions between Russia and Ukraine. This week, traders remain cautious about potential escalations that could trigger renewed buying. Macroeconomic indicators, such as the US PCE price index, are expected to influence gold’s near-term performance.

FAQs on Gold Price Trends

1. Why have gold prices dropped below ₹80,000?
Gold prices declined due to profit booking, easing geopolitical tensions, and a stronger US dollar affecting global gold demand.

2. How much have gold and silver prices fallen in India?
Gold fell by ₹1,000 to ₹79,400 per 10 grams (99.9% purity), while silver declined by ₹1,600 to ₹91,700 per kg.

3. What global factors are affecting gold prices?
Key factors include profit booking, easing tensions in the Middle East, and upcoming US inflation data.

4. Will gold prices rise again?
Gold prices depend on geopolitical developments (e.g., Russia-Ukraine conflict) and economic indicators like inflation and dollar strength. Renewed tensions could lead to a short-covering rally.

5. What is the outlook for gold in the futures market?
Gold futures for December delivery dropped by 1.38% on MCX, trading at ₹76,545 per 10 grams. However, global economic trends and geopolitical factors could influence future price movements.