Gold Price Falls Rs 500 Per 10 Gram in Delhi as Strong Dollar, Rising Oil Prices Weigh on Bullion
SRINAGAR: Gold prices declined by Rs 500 per 10 gram in the national capital on Monday, as rising crude oil prices and a stronger US dollar put pressure on precious metals.
Gold of 99.9 per cent purity was trading at Rs 1,55,400 per 10 gram, down from Rs 1,55,900 at the close of business on Friday, according to local traders.
Silver prices, however, remained unchanged at Rs 2,34,600 per kilogram, inclusive of taxes.
Gold, Silver Prices Fall in International Markets
The weakness in the domestic bullion market came amid a broader decline in international precious-metal prices.
Spot gold fell 1.3 per cent to USD 4,291.71 an ounce, while silver declined nearly 3 per cent to USD 62.82 an ounce.
Gold has slipped back towards the USD 4,300-per-ounce level, while silver has continued its decline for a third consecutive week.
Market sentiment has been affected by changing expectations over the outlook for US interest rates, with expectations of further monetary tightening weighing on demand for non-yielding assets such as gold.
Rising Crude Oil Prices Add to Inflation Concerns
A sharp increase in crude oil prices has added another layer of uncertainty for global markets.
Oil prices climbed to around USD 103 a barrel, their highest level in four months, after Saudi Arabia shut its East-West pipeline following drone attacks.
Higher energy prices can increase inflationary pressures, potentially complicating the outlook for interest rates and creating additional volatility in financial markets.
The Australia and New Zealand Banking Group (ANZ) has forecast three 25-basis-point interest-rate hikes by the US Federal Reserve by March 2027, citing continued inflationary risks.
According to the bank, developments in West Asia and elevated energy prices could keep inflationary pressures high.
Geopolitical Uncertainty Could Support Gold
Despite the recent decline in gold prices, the broader outlook for bullion remains supported by geopolitical uncertainty.
Gold traditionally attracts investor demand during periods of heightened geopolitical and economic uncertainty because of its safe-haven characteristics.
ANZ has retained its 12-month gold price target at USD 5,400 an ounce, indicating that the bank continues to see significant upside potential despite the recent correction.
Gold Demand Remains Supported
Several factors are continuing to provide support to the longer-term gold outlook.
These include recovering holdings in gold-backed exchange-traded funds (ETFs), speculative positioning, institutional demand from China and increasing participation by investors in India.
For Indian consumers and investors, global gold prices, the US dollar, international interest rates, crude oil prices and geopolitical developments remain important factors influencing domestic bullion prices.
The latest fall therefore comes amid a combination of stronger dollar pressure, higher oil prices and changing US rate expectations, even as safe-haven demand and investment interest continue to support gold’s longer-term outlook.