Gold prices continued their downtrend and lost ₹441 per 10 grams to close at ₹1,21,077 amid volatile trading on Monday. The yellow metal has plunged by ₹8,507 per 10 gm or 7 per cent in the past week to ₹1,21,077 per 10 gm against ₹1,29,584 on October 17, on the back of a bearish trend in the international markets.
In the US, gold fell by $70 an ounce to $4,040 on weak demand and easing of trade tension with China.
Despite the bearish sentiments, gold has delivered over 55 per cent return so far in this year and is expected to gain further strength, given the geopolitical issues and US tariff tension with China.
The fall in prices comes after the robust gold jewellery sales during the peak Dhanteras and Diwali season in India.
Suvankar Sen, MD & CEO, Senco Gold, said the fall in prices is an opportunity for jewellery buyers for weddings, and they should utilise the opportunity given the uncertainty in global markets still sustain.
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said gold prices extended their weakness, declining by ₹1,550 to ₹1,21,900, as optimism over a potential US-China trade deal encouraged continued profit booking in bullions.
Renisha Chainani, Head of research at Augmont, said gold prices have been consolidating in the range of $4,060 (Rs 120,600) and $4,170 (Rs 124,600) after a sharp sell-off. Either side breakout will take prices 3-4 per cent higher or lower.
Rupee’s dip
On the international front, Comex gold slipped 1.70 per cent, while MCX gold saw a relatively smaller drop of 1.20 per cent due to rupee depreciation and a steady dollar index, he said.
The easing of global uncertainty has led to a temporary cooling in safe-haven demand, though traders remain cautious ahead of key US inflation data and further updates on trade negotiations, he added.
Gold is likely to remain volatile with support near ₹119,500 and resistance around ₹124,500, said Trivedi.
Satish Dondapati, Fund Manager – ETF, Kotak Mutual Fund said the gold rally began in April supported by expectations of a potential US Federal Reserve rate cut, heightened geopolitical tensions, robust investment demand and continued central bank accumulation.
Increased haven buying
The most recent $250–$300 upswing was largely driven by increased haven buying amid concerns over the ongoing US government shutdown, he said.
Subsequently, gold prices witnessed some profit-taking following an extended rally of nearly 25 per cent in two months, he said
In the near term, gold is likely to remain volatile due to uncertainty surrounding global trade policies and uncertainty over the US shutdown. However, in the medium to long term, the key structural drivers for gold remain intact — including elevated global debt levels, persistent central bank demand, and ongoing geopolitical and inflationary pressures, he said.