Gold Prices Decline for Sixth Consecutive Session, Falling ₹2,100 to ₹1.56 Lakh per 10 Grams

Gold prices extended their losing streak for the sixth straight session in the national capital, falling ₹2,100 to ₹1.56 lakh per 10 grams on Wednesday, tracking a bearish trend in global markets. The yellow metal of 99.9 per cent purity depreciated to nearly a three-week low of ₹1.56,100 per 10 grams, inclusive of all taxes, down from its previous close of ₹1,58,200 per 10 grams. Gold was last seen around these levels on August 14, when it was quoted at ₹1,56,200 per 10 grams.

With this latest decline, the precious metal has lost a total of ₹11,000 over the past six trading sessions, coming down from ₹1,67,100 recorded on August 25. Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, noted that precious metals remained under heavy selling pressure, with spot gold falling to its lowest level in over three weeks.

Silver also joined the downward trend for the second consecutive day, plunging ₹5,000 to a two-week low of ₹2,35,500 per kilogram, inclusive of all taxes. The white metal had settled at ₹2,40,500 per kg in the preceding session.

Market analysts point to multiple macroeconomic factors driving the sell-off. The escalation in the West Asia conflict has lifted oil prices and stoked inflation and rate hike fears, adding pressure on commodities. Crude prices surged as renewed military exchanges between the US and Iran pushed oil rates higher. Aamir Makda, Commodity & Currency Analyst at Choice Broking, stated that rising oil prices and subsequent inflation concerns are weighing heavily on the markets.

In international markets, spot gold gained $25.24, or 0.58 per cent, to $4,303.12 per ounce, while silver dropped nearly 1 per cent to $63.64 per ounce. However, domestic prices faced headwinds due to ongoing concerns regarding potential interest rate hikes by the US Federal Reserve. Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, explained that higher oil prices have coincided with hawkish comments from Federal Reserve Chair Kevin Warsh, who has called for action if elevated inflation does not ease quickly.

Concurrently, global gold-backed exchange-traded funds recorded net outflows after seven consecutive sessions of inflows as rate-hike concerns resurfaced among investors. Vedika Narvekar, Research Analyst for Commodities & Currencies at Anand Rathi Share and Stock Brokers Ltd, noted that market participants are now awaiting upcoming US labour market data for further cues on the Federal Reserve's next policy moves.

"The recent correction in gold and silver prices reflects broader macroeconomic shifts, particularly concerns over US Federal Reserve interest rate policies and rising crude oil prices driven by geopolitical tensions. For businesses and investors, such volatility underscores the importance of closely monitoring global inflation trends and currency movements. When commodities face sustained selling pressure due to shifting monetary policies, capital allocation strategies often undergo a re-evaluation across sectors." — Dr. Shishir Gupta, Founder & CEO, StartupLanes