Gold prices in the national capital fell for the fourth consecutive session on Thursday, slipping Rs 350 to Rs 1,48,100 per 10 grams, according to The Times of India. The decline was attributed to a stronger rupee and subdued local demand, even as international bullion prices moved higher. Meanwhile, silver prices continued their downtrend, dropping Rs 7,800 to Rs 2,32,000 per kilogram in the domestic market.
Fundamental Drivers: Rupee Strength and Demand Weakness
The appreciation of the Indian currency reduced the cost of imported gold, keeping domestic prices under pressure, The Times of India reported. On the demand side, local buyers showed subdued interest, further weighing on prices. Internationally, spot gold held near $4,122 per ounce on Friday but remained on course for a weekly decline of more than 1%, as markets balanced safe-haven demand against expectations of higher US interest rates.
Policy Signals from the Federal Reserve
Minutes from the Federal Reserve's June policy meeting revealed growing concern among policymakers about persistent inflation, with a few officials seeing a case for raising interest rates, The Times of India noted. Investors are closely tracking comments from Fed officials and upcoming US economic data for fresh clues on the central bank's policy trajectory. According to the CME FedWatch Tool, traders are now pricing in a 64% probability of a September rate increase, up from around 54% a week ago. Higher interest rates generally reduce the appeal of non-yielding assets such as gold.
Geopolitical Tensions and Inflation Concerns
Fresh military exchanges between the United States and Iran have reinforced concerns over inflation, prompting markets to raise expectations of a Federal Reserve rate hike, The Times of India reported. This geopolitical risk has injected volatility into precious metals, as traders weigh safe-haven demand against the prospect of tighter monetary policy.
Price Comparison: Domestic vs International Markets
| Market | Commodity | Price (Recent) | Change |
|---|---|---|---|
| Domestic (Delhi) | Gold (10g) | Rs 1,48,100 | -Rs 350 (session) |
| Domestic (India) | Silver (1kg) | Rs 2,32,000 | -Rs 7,800 (session) |
| International | Spot Gold (oz) | $4,122 | On track for >1% weekly loss |
Source: The Times of India
Outlook: Cautious Trading Ahead of US Data
Investors remain focused on global market trends and upcoming US economic data for further direction, The Times of India stated. The combination of a stronger rupee, subdued local demand, and rising US rate hike expectations continues to pressure domestic gold and silver prices. While international bullion has steadied after recent declines, the weekly loss underscores lingering uncertainty over inflation and monetary policy. Traders are advised to monitor Fed commentary and geopolitical developments for near-term price signals.
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