Gold prices in the national capital plunged below Rs 79,000 per 10 grams on Tuesday, weighed by subdued demand from stockists and retailers, according to local market analysts quoted by news agency PTI. The 99.9 per cent purity gold fell Rs 550 to Rs 78,950 per 10 grams, against Monday’s close at Rs 79,350.
Over the past year, gold prices have surged by Rs 15,030, or 23.5 per cent, highlighting a significant rally driven by various economic factors.
In 2024, domestic gold prices surged more than 20 per cent while spot gold rose around 26 per cent,” Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities told PTI.
Gandhi attributed the surge to factors such as geopolitical uncertainties, interest rate cuts by Western central banks, and robust demand from both central banks and high-net-worth individuals.
Silver prices see steep drop
Silver prices also witnessed a sharp decline, plunging Rs 2,000 to Rs 89,700 per kilogram on Tuesday from Rs 91,700 in the previous session. Meanwhile, silver contracts for March delivery on the Multi Commodity Exchange (MCX) edged up Rs 169, or 0.19 per cent, to Rs 87,700 per kilogram.
Mixed trends in futures markets
On the MCX, gold contracts for February delivery rose Rs 253, or 0.33 per cent, to Rs 76,513 per 10 grams, showing slight recovery following Monday’s losses. Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, said,”Additionally, thin trading volumes due to the holiday period and New Year celebrations have kept gold prices range-bound, with limited participation from market participants.”
Globally, Comex gold futures gained $4.8 per ounce, or 0.18 per cent, to $2,622.90 per ounce. However, Comex silver futures dipped 0.16 per cent to $29.37 per ounce during Asian market hours.
Outlook for bullion
Chintan Mehta, CEO of Abans Holdings, noted that gold prices remain steady as traders temper expectations for Federal Reserve rate cuts in 2025 following hawkish signals. The focus now shifts to upcoming US economic data, including the home price index, unemployment claims, and manufacturing PMI, which could provide further direction for bullion prices.
Despite low market participation due to the holiday season, analysts expect gold prices to strengthen as investors gradually increase their exposure. “A delay in additional interest rate cuts could lead to short-term declines, creating opportunities for accumulation,” Mehta added.
