Gold Prices Plummet in Delhi, Dropping to Rs 1.61 Lakh per 10 Gram

Gold Prices Decline Amid US-Iran Tensions and Rising Safe-Haven Demand

Gold prices in the national capital declined by Rs 1,100 to Rs 1.61 lakh per 10 grams on Wednesday, following weak global trends. Investors assessed the impact of persistent US-Iran tensions and rising safe-haven demand for the dollar.

According to the All India Sarafa Association, the price of gold with 99.9 per cent purity depreciated by Rs 1,100 to Rs 1,61,300 per 10 grams (inclusive of all taxes) from Tuesday's closing level of Rs 1,62,400 per 10 grams.

Silver prices also weakened, falling by Rs 3,300 to Rs 2,69,700 per kilogram (inclusive of all taxes). The previous session had seen silver settle higher at Rs 2,73,000 per kg.

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

The decline in gold prices can be attributed to the ongoing uncertainty surrounding US-Iran negotiations. The persistent threat of higher energy prices and possible disruptions to global trade flows has raised concerns that inflation could remain elevated for longer. This has strengthened expectations that the Federal Reserve may maintain a tighter monetary policy for an extended period, a negative factor for precious metals.

In the international markets, spot gold fell 1.03 per cent to USD 4,461.02 per ounce, while silver declined nearly 3 per cent to USD 74.96 per ounce.

The prospects of persistent inflation have further weakened gold and silver prices. Investors are now awaiting US macroeconomic data, including weekly ADP employment numbers and Thursday's Personal Consumption Expenditures (PCE), the Fed's preferred gauge of inflation, for fresh cues on the trajectory of interest rates and their impact on bullion demand.

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

Geopolitical developments continue to dominate trading sentiment across precious metals markets. Israel's strikes in Lebanon have heightened concerns over a broader regional conflict, even as Iran's Islamic Revolutionary Guard Corps indicated that the chances of renewed war with the US remain low.