Following an all-time high gold rate of Rs 81,000 last month, the gold prices have significantly fallen to Rs 75,790 per 10 grams in India. On 18th November, the Gold rate was Rs 76,885 per 10 grams.
As of 16th November, the price of 24K gold in India was Rs 75,650 per 10 grams. A drop of Rs 110 from the previous day was observed. The 22K gold variety was at Rs 69,350 per 10 grams, whereas 18K gold was priced at Rs 56,740.
There are multiple factors that affect the gold rates in India. These factors include fluctuations in the global market to the strength of the USD, import costs, interest rates on banks' fixed deposits, economic stability, seasonal prices, inflation and demand-supply and more.
In the current scenario, global trends and U.S. economic data are influencing the gold prices. In October, US inflation was higher than expected, which caused prices to rise. This eventually made the US dollar stronger because of which a fall in gold prices was seen. This happened because a stronger dollar makes gold cheaper in other currencies, but when local currencies get weak, gold gets more expensive, which lowers the demand even more.
Additionally, higher inflation makes it harder for the central banks to lower the interest rates and when interest rates stay high, the holding gold becomes less attractive due to which only few people buy it. This causes prices of gold to drop.
MD of Kama Jewelry, Colin Shah informed about the current market landscape and said, “We are currently in a low-interest regime, post two straight cuts announced by the US Fed, and the RBI is expected to cut rates next month. This could fuel a rally in gold prices further. As we are expected to be in a lower-for-longer interest rate regime, gold prices are expected to stay elevated. The geopolitical tensions are expected to support the yellow metal further.”
Fawad Razaqzada, market analyst at Forex.com. said, “Gold’s weakness reflects expectations of a more restrictive US monetary policy in 2025 under Trump.”
Dr. Renisha Chainani stated, “Renewed geopolitical tensions will overcast the 'Trumponomics' and precious metals prices will rebound again this week. Gold prices have made a short-term bottom now and are expected to rebound towards Rs 75,000 and Rs 77,000 and silver to Rs 92,000 and Rs 95,000.”
Jateen Trivedi, VP Research Analyst at LKP Securities, highlighted the impact of a strong US CPI data on gold prices and said, “Gold’s weakness persisted with prices falling near ₹73,500 on the MCX as the dollar climbed and US CPI data came in higher than anticipated at 2.6 percent. This has raised concerns that further rate cuts by the Fed may be paused, adding pressure on gold prices.”