Copyright newsbytesapp
Gold prices have witnessed a sharp decline after hitting record highs earlier this month. The fall is mainly due to profit booking by investors, easing geopolitical tensions, and a stronger US dollar. Spot gold hit an all-time high of $4,381.21 per ounce but has since fallen over 6% to just below $4,100. In India, the rates fell from ₹1.32 lakh to around ₹1.21 lakh per 10g due to global cues and seasonal adjustments. The recent decline in gold prices can be attributed to profit booking after a steep rally. With the festive season demand tapering off and investors reassessing risk positions, gold's safe-haven appeal has temporarily weakened. Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA), said prices continue to drop as investors take profits and global cues become uncertain. Market analysts have also pointed to a technical correction after an extended rally. Tejas Shigrekhar, Chief Technical Research Analyst at Angel One, observed that gold had reached historically overbought levels, triggering a reversal in momentum. A stronger US dollar index has also weighed on gold prices as it makes the precious metal more expensive for investors using other currencies. Historically, the dollar and gold move inversely due to higher dollar values lowering the appeal of non-yielding assets like bullion. Gold's safe-haven demand has also been tempered by improving geopolitical and trade sentiment. Reports of progress toward a US-India trade agreement and possible dialogue between the US and China have encouraged investors to shift back to risk assets. Darshan Desai, CEO of Aspect Bullion & Refinery, said gold prices are set to break their nine-week winning streak as investors book profits amid optimism over trade talks and a stronger dollar.
