Gold Prices Fall ₹1,700 After Four Days of Record Rally

Gold prices eased on Tuesday after surging for four days in a row. The prices of gold decreased by a record amount of Rs 1,700 on the second trading day of the current week, as per the All India Sarafa Bazaar Association, closing at a rate of Rs 1,35,900.

Gold of 99.9 % purity was up by Rs 4,000 on Monday, trading at Rs 1,37,600 per 10 grams. Gold prices have increased by Rs 6,000 in the past four trading days.

Jatin Trivedi, Vice President, Research Analyst - Commodity and Currency, LKP Securities, said, "Gold prices witnessed profit-booking and remained volatile, pushing the yellow metal towards the US$4,275 level in global markets and remaining under pressure."

HDFC Dilip Parmar, Research Analyst at Securities, echoed the same sentiments, saying, “Domestic gold prices also softened, snapping a four-day rally. However, the continued weakness of the Indian rupee largely offset these losses, which remained at record lows.

Silver prices also fell by ₹1,000 in local bullion markets to ₹1,98,500 per kilogram (including all taxes). According to the association, silver prices in the market remained stable at ₹1,99,500 per kilogram, also its highest level ever.

Parmar further said that with the onset of the inauspicious period, demand for physical jewellery is expected to decline, while investment demand is expected to remain strong, a trend driven by the prevailing risk-averse sentiment in the market.

In international markets, spot gold prices broke their five-day winning streak and fell by ₹27.80, or 0.65%, to ₹4,277.42 per ounce.

Dilip Parmar said, "Gold prices witnessed a marginal decline after rising for five consecutive sessions. The softening occurred as market participants strategically positioned themselves ahead of important US economic data due this week."

He further clarified that these forthcoming reports are about to bring vital confirmation on the Federal Reserve’s tendency to lower interest rates, an essential macroeconomic trigger in the non-yielding asset. Spot silver prices in overseas markets also declined by USD 1.07, or 1.67%, to USD 63.02 per ounce.

Praveen Singh, Research Analyst at Mirae Asset Sharekhan, said bullion prices are trading lower due to a cautious sentiment ahead of the US non-farm payroll (NFP) data due later today, which will include NFP figures for both October and November.