Gold prices fall Rs 1,100 in Delhi amid weak global trends

Gold prices dropped Rs 1,100 in Delhi on Wednesday amid weak global trends and stronger safe-haven demand for the dollar. Silver prices also declined sharply as investors tracked US-Iran tensions and awaited key US economic data for interest rate signals

New Delhi: Gold prices declined by Rs 1,100 to Rs 1.61 lakh per 10 grams in the national capital on Wednesday, tracking weak global trends as investors assessed the impact of persistent US-Iran tensions and rising safe-haven demand for the dollar.

According to the All India Sarafa Association, the yellow metal of 99.9 per cent purity depreciated by Rs 1,100 to Rs 1,61,300 per 10 grams (inclusive of all taxes) from Tuesday’s closing level of Rs 1,62,400 per 10 grams.

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Silver also weakened, falling by Rs 3,300 to Rs 2,69,700 per kilogram (inclusive of all taxes). The white metal had settled at Rs 2,73,000 per kg in the previous session.

“Gold extended losses on Wednesday as uncertainty surrounding US-Iran negotiations continued to pressure precious metals,” Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, said.

Fading hopes of a near-term agreement revived concerns over higher energy prices and possible disruptions to global trade flows, raising fears that inflation could remain elevated for longer, he added.

“The prospect of persistent inflation strengthened expectations that the Federal Reserve may maintain a tighter monetary policy for an extended period, a negative factor for precious metals such as gold and silver,” Gandhi said.

In the international markets, spot gold fell 1.03 per cent to USD 4,461.02 per ounce, while silver also declined nearly 3 per cent to USD 74.96 per ounce.

“Spot gold is trading below USD 4,500 an ounce, while silver has slipped more than 2 per cent to below USD 75, extending Tuesday’s losses as the dollar strengthened on renewed safe-haven demand after fresh US strikes in southern Iran,” Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said geopolitical developments continued to dominate trading sentiment across precious metals markets.

Israel’s strikes in Lebanon further heightened concerns over a broader regional conflict, even as Iran’s Islamic Revolutionary Guard Corps indicated that the chances of renewed war with the US remained low.

Investors are now awaiting US macroeconomic data, including weekly ADP employment numbers later in the day and Thursday’s Personal Consumption Expenditures (PCE), the Fed’s preferred gauge of inflation, for fresh cues on the trajectory of interest rates and their impact on bullion demand.