Gold prices in Delhi witnessed a significant decline on Tuesday, dropping by Rs 600 to settle at Rs 1.26 lakh per 10 grams. This downward movement came in response to weak global cues and reduced demand from local jewellers.
Market Performance Details
The precious metal market in the national capital saw substantial activity as 10 grams of 24-carat gold closed at Rs 1,26,000, marking a notable decrease from previous trading sessions. Silver followed the same trend, with prices falling by Rs 400 to reach Rs 79,300 per kilogram.
Market analysts attributed this price correction to multiple factors influencing the bullion market. International gold prices traded lower at USD 2,315 per ounce in global markets, creating a ripple effect on domestic rates. The decline in international markets primarily stemmed from shifting investor sentiment and changing expectations regarding US Federal Reserve policies.
Factors Driving the Price Movement
Several key elements contributed to the downward pressure on gold prices. The strengthening US dollar index played a crucial role in making gold more expensive for holders of other currencies, thereby reducing demand. Additionally, market participants are closely monitoring statements from Federal Reserve officials for clues about future interest rate decisions.
In the Delhi markets specifically, traders reported reduced buying activity from both retail consumers and jewellery manufacturers. The combination of high prices and market uncertainty has led many potential buyers to adopt a wait-and-watch approach, further contributing to the price decline.
Broader Market Implications
The silver market mirrored gold's performance, with silver prices declining to Rs 79,300 per kg from the previous close of Rs 79,700. This parallel movement underscores the interconnected nature of precious metal markets and how global factors simultaneously impact multiple commodities.
Industry experts suggest that the current price adjustment might present buying opportunities for long-term investors. However, they caution that short-term volatility is expected to continue as markets digest incoming economic data and central bank communications.
The bullion market in India, particularly in major trading hubs like Delhi, remains sensitive to both international price movements and domestic demand patterns. With the wedding season approaching, market watchers are observing whether traditional gold buying will provide support to prices in the coming weeks.
