Gold prices in India declined sharply on Friday, snapping a three-day winning streak, as optimism surrounding Iran nuclear talks tempered safe-haven demand. The yellow metal of 99.9 percent purity depreciated by Rs 600 to Rs 1,64,900 per 10 grams (inclusive of all taxes), according to local marketmen.
Market Sentiment Improves
The decline in gold prices came amid reports of progress in negotiations between Iran and world powers, which eased geopolitical tensions that had driven investors toward safe-haven assets earlier in the week. Market participants noted that the improved sentiment reduced the appeal of gold as a hedge against uncertainty.
Impact on the Domestic Market
In the domestic market, the drop was attributed to a combination of global cues and profit-booking after the recent rally. Dealers reported that physical demand remained subdued as buyers waited for further price corrections. The rupee's movement against the dollar also played a role in determining the local price.
Global Context
Internationally, spot gold prices edged lower as the dollar strengthened and risk appetite improved. The possibility of a diplomatic resolution in the Middle East has been a key factor weighing on gold's allure. Analysts suggest that any further progress in talks could lead to additional downside for the precious metal.
Outlook
Market experts remain cautious, noting that while short-term volatility persists, the long-term outlook for gold depends on central bank policies and inflation trends. Investors are advised to monitor geopolitical developments and global economic data for further cues.
