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Gold prices have dropped due to stronger US dollar, rising bond yields, easing inflation, and profit booking. Here’s why gold is under pressure in domestic and global markets.
After nine weeks of rally, Gold takes a sharp fall
New Delhi: Gold prices in international markets fell nearly 3% this week after their previous record-breaking run. This is the first weekly decline after nine weeks of continuous gains. Gold prices are now down to $4,118.68 per ounce, the sharpest decline since May.
International trends also reflected in Indian markets. MCX December gold was trading 1% lower at Rs 1,23,222 for 10 grams, while silver fell 1.5% to Rs 1,46,365 per kilogram. Gold saw its sharpest decline of up to 5% in the early days of the week, while silver recorded a 6% decline for the week, closing at $48.62 per ounce.
According to experts, there are three main reasons behind gold's decline:
Profit Booking: Investors are selling their holdings after consistently breaking records. Gold-backed ETFs saw the largest outflows.
Strong Dollar: The dollar index strengthened for three consecutive sessions, making gold more expensive in other currencies.
Expectations of a US-China Trade Deal: Expectations of easing trade tensions reduced demand for safe haven investments.
KCM Trade Chief Analyst Tim Waterer said, "The potential meeting between the US and Chinese leaders strengthened the dollar and reduced gold demand."
Gold prices are now focused on the US Consumer Price Index (CPI). If the CPI remains at the expected 3.1%, the Fed could cut interest rates, which would support gold prices.
Jigar Trivedi, Senior Analyst at Reliance Securities, said, "MCX December gold prices could fall to Rs 1,23,000/10g due to weak international market sentiment."
Gold Price Today: Post-Diwali trends show slight dip amid market fluctuations
JAP Morgan estimates that gold prices could reach $5,055 per ounce in the fourth quarter of 2026, and exceed $8,000 per ounce by 2028. According to prominent investor Ray Dalio, global economic instability and monetary changes are continuing to boost gold demand.
The recent decline is due to technical and international market trends, but gold's long-term attractiveness and demand as a safe-haven investment remain strong. Investors should avoid short-term fluctuations and adopt a long-term view.
