Prime Highlights :
MCX gold prices have declined over 7% from recent all-time peaks to reach a five-week low.
Decline is due to profit-taking, easing of global tensions, and investor switching to riskier assets.
Key Facts :
MCX gold futures had last traded at ₹92,090 per 10 grams, having dropped to a session low of ₹90,890.
Spot gold settled at $3,179.07/oz after having fallen earlier to a low since April 10.
Key Background :
Indian gold prices have corrected sharply in recent days, declining over 7% from their record high of ₹99,358 per 10 grams on Multi Commodity Exchange (MCX). The yellow metal on May 15 hit a five-week low as futures traded at ₹90,890 in intraday trade. The steep pullback is in the wake of a general pattern of declining precious metals across the world.
The main forces behind the decline are profit-taking by investors after gold’s prolonged rally in the first half of this year. In addition, a shift in sentiment in favor of risk-on assets like equities on account of reduced geopolitical tensions and global economic stability expectations has taken away gold’s traditional safe-haven appeal.
At the international level, spot gold briefly dipped to a five-week low before stabilizing at $3,179. US dollar weakness provided support for a modest overseas price rebound. However, investors remain cautious of short-term US economic reports and Federal Reserve statements that could influence interest rate expectations and influence demand for gold.
In the local market, the decline has been observed in all major cities, while physical gold prices in Delhi, Mumbai, Chennai, and Hyderabad also traded lower. Experts are now suggesting that gold can test near-term important support levels in the range of ₹90,500–₹91,000. Investors are advised to monitor global cues, bond yields, and central bank policy announcements closely before making fresh positions.
Gold’s recent volatility is typical of an adjustment phase after months of steep gains. Although medium-to-long-term fundamentals remain supportive as a result of continuing inflationary pressures and central bank demand, short-term volatility will persist as global economic narratives shift.
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