Precious metals in India witnessed a pullback on Monday, January 7, with both gold and silver prices trading lower on the Multi Commodity Exchange (MCX) after showing initial strength in early trading. This movement mirrored a cautious trend in international markets, where Comex gold also saw a slight retreat.
Market Movement: A Day of Reversal
After opening on a positive note, the domestic bullion market saw prices turn negative as the trading session progressed. On the MCX, the February gold futures contract was trading lower, slipping below the psychologically significant level of Rs 63,000 per 10 grams. Similarly, silver futures for March delivery also gave up their early gains, trading in the red.
This decline followed a period of gains last week and reflects a classic profit-booking scenario, where traders lock in gains after a price rise. The dip in domestic prices was influenced by a softer trend in global markets, where Comex gold was trading near $2,050 per ounce, showing a marginal decline. The strength of the US dollar and fluctuations in US Treasury yields continue to be key external factors influencing precious metal prices worldwide.
City-Wise Gold and Silver Rates for January 7
The price correction was reflected across major Indian cities, though rates vary due to local taxes, making charges, and demand-supply dynamics. Here is a snapshot of the prevailing rates for 24-carat and 22-carat gold, along with silver, in key markets:
Delhi: The capital city saw 24-carat gold priced at approximately Rs 65,300 per 10 grams, while 22-carat gold was around Rs 59,850. Silver was trading near Rs 77,500 per kilogram.
Mumbai: In the financial hub, 24-carat gold was available at about Rs 65,100 per 10 grams. The rate for 22-carat gold hovered near Rs 59,700. Silver prices stood close to Rs 77,400 per kg.
Chennai: Prices in Chennai were slightly higher, with 24-carat gold quoted near Rs 66,000 per 10 grams. The 22-carat variant was around Rs 60,500. Silver traded near Rs 78,800 per kilogram.
It is crucial for buyers to note that these are base prices, and the final jewellery cost includes Goods and Services Tax (GST), making charges, and other levies, which can add a significant premium.
What's Driving the Precious Metals Market?
The current price action is a tug-of-war between several global and domestic factors. On the supportive side, geopolitical tensions and expectations of eventual interest rate cuts by the US Federal Reserve in 2024 provide a floor for gold prices, as it is seen as a safe-haven asset.
However, these supportive factors are being countered by a resilient US dollar and traders' tendency to book profits after rallies. Market participants are now keenly awaiting key US economic data, including inflation figures, due later this week, which will offer fresh cues on the Fed's future monetary policy path.
Analysts suggest that the broader trend for gold remains cautiously optimistic, but the metal is likely to see continued volatility in the near term. For silver, its dual role as a precious and industrial metal means its price is also sensitive to global industrial demand outlook.
For Indian investors and jewellery buyers, these dips are often viewed as buying opportunities, especially with the upcoming wedding season. However, experts advise a staggered investment approach rather than lump-sum purchases, given the current market volatility. Monitoring international trends and the rupee-dollar exchange rate remains essential, as a weaker rupee makes gold imports more expensive, supporting domestic prices.
