Gold Loses Shine as US-China Deal Dims Safe-Haven Demand

The improving dollar and decrease in global uncertainties have led to a fall in demand for gold as a safe investment, which is reflected in its price. Gold price in Delhi fell ₹ 300 to ₹ 1,25,300 per 10 grams on Monday.

According to the All India Sarafa Association, gold of 99.5 percent purity fell by ₹300 to ₹1,24,700 per 10 grams (including all taxes). It had closed at Rs 1,25,000 per 10 grams on Friday. Gold of 99.9 percent purity had closed at Rs 1,25,600 per 10 grams on Friday. On the other hand, the price of silver rose by Rs 1,000 to Rs 1,54,000 per kilogram (including all taxes). Silver had closed at Rs 1,53,000 per kilogram on Friday.

The dollar index, which measures the dollar's strength against a basket of six currencies, rose 0.09 percent to 99.89, placing pressure on bullion prices. In the international market, Spot gold fell 0.14 percent to below $4,000 to $3,996.77 per ounce. Silver spot was marginally lower at $48.64 per ounce.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, said, "Gold prices fell below $4,000 per ounce on Monday. This was due to diminishing expectations of interest rate cuts. Demand for gold as a safe-haven investment also declined after the US-China trade deal."

China has removed long-standing tax incentives on gold sales. This could increase consumer prices and weaken demand in one of the world's largest bullion markets. Saumil Gandhi, Senior Analyst (Commodities) at HDFC Securities, said, "Traders will now focus on US macroeconomic developments this week, including the ISM PMI data and ADP private payrolls data." The upcoming data will provide more clues about monetary policy.