Gold prices extended their slide for the fourth straight session, falling Rs 2,840 to Rs 1.5 lakh per 10 grams in the national capital on Friday, while silver slumped to over two-month low of Rs 2.4 lakh per kg as a resurgent US dollar sparked selling in precious metals.
According to the All India Sarafa Association, the yellow metal of 99.9 per cent purity declined Rs 2,840 to Rs 1,50,600 per 10 grams (inclusive of all taxes) from Thursday’s closing level of Rs 1,53,440 per 10 grams.
Silver also witnessed a steeper decline, plunging Rs 8,040 to Rs 2,40,700 per kilogram (inclusive of all taxes). It had settled at Rs 2,48,740 per kg in the preceding session.
The white metal had traded near this level on April 7, when it was quoted at Rs 2,40,000 per kg.
Analysts said the bullion market remained under pressure as investors increasingly favoured the dollar amid expectations that US interest rates could stay elevated for higher.
Gold prices remained under pressure on Friday as the strength of the US dollar is negatively impacting market sentiment, as the dollar index reached a fresh one-year high, Saumil Gandhi, Senior Analyst – Commodities at HDFC Securities, said.
The latest decline marks a sharp reversal from the record highs seen earlier this year, with gold now headed for a third weekly loss.
Gold prices extended their corrective phase and registered a third consecutive weekly decline, Pankaj Singh, smallcase manager, Founder and Principal Researcher, SmartWealth AI, said.
“The correction was driven by expectations that interest rates may remain elevated for longer, pushing bond Treasury yields higher and increasing the opportunity cost of holding non-yielding assets such as gold,” he added.
In the international markets, spot gold slipped USD 60.70, or 1.44 per cent, at USD 4,148.45 per ounce and silver fell 1.51 per cent to USD 64.73 per ounce.
Analysts noted that market sentiment was also influenced by uncertainty surrounding the next phase of the US-Iran peace agreement announced earlier this week.
According to reports, US Vice-President J D Vance cancelled the planned visit to Switzerland, while Iran delayed sending its delegation for talks following fresh Israeli strikes in Lebanon, raising doubts about the timeline for implementing the accord.
“Spot gold is trading lower in the overseas trade as the metal remains vulnerable amid hawkish Federal Reserve’s repricing and lingering uncertainty over US-Iran talks,” Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, said.
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said, “Market participants should remain focused on developments surrounding the US-Iran negotiations, as any progress or setback in talks could add further volatility to precious metals.”
“While geopolitical risks may provide volatility, interest rate expectations are currently the dominant driver for gold prices,” he added.
