Gold prices showed a modest recovery on Monday, breaking a six-day losing streak. However, both international and domestic gold prices remain around 9% below their recent peaks, driven by global economic conditions and market sentiment.
Internationally, gold was trading at USD 2,597 per ounce, slightly up from its recent low of USD 2,537 per ounce but still down from its peak of USD 2,790 per ounce. In India, gold on the Multi Commodity Exchange (MCX) was trading at Rs 74,657 per 10 grams, marking a 1% intraday gain, but still significantly lower than its peak of Rs 80,000 per 10 grams.
Market analysts highlighted that the pullback in gold prices has found support at key technical levels. “USD 2,536 has emerged as a pivotal support level. While modest gains have been observed, stronger buying momentum above USD 2,600 is needed to signal a bullish reversal,” said Mumbai-based Kedia Advisory.
The decline in gold prices has been influenced by expectations of continued hawkishness from the US Federal Reserve, robust US bond yields, and strong economic data, which have weighed on investor sentiment. Geopolitical factors, including ongoing conflicts in Ukraine and Gaza, have provided some support for safe-haven demand but have not been enough to drive significant price recovery.
Despite the recent correction, gold has gained more than 24% this year, supported by the US Federal Reserve’s easing cycle, increased central bank purchases, and heightened geopolitical and economic risks.
Brokerage firm Nirmal Bang said, “Gold is near a two-month low and on track for its worst week since June 2021, as traders scale back expectations of a Federal Reserve interest rate cut next month. Bullion has fallen for six consecutive days, resulting in a weekly loss exceeding 4%.”
Colin Shah, Managing Director of Kama Jewelry, also added that the recent price drop could benefit Indian buyers amid the ongoing wedding season. “Gold buying is integral to wedding celebrations in India. Prices have fallen due to rising US inflation, which has dampened hopes for a Fed rate cut,” he said.
Looking ahead, Shah projected gold prices to stabilize in the short to medium term. “Prices will likely recover to recent highs as geopolitical tensions ease and central banks, including the US Federal Reserve and RBI, soften interest rates in the first half of 2025,” he added.
(Inputs from ANI)
