MUMBAI — Gold prices fell below the $4,000-per-ounce mark on Monday as easing geopolitical tensions and a stronger U.S. dollar reduced safe-haven demand, ending a sharp rally that had driven the metal to record highs earlier this year.
According to data from the India Bullion and Jewellers Association (IBJA), spot gold dropped 2.7 percent from last week to $3,984.43 an ounce. In domestic markets, the price of 10 grams of 24-carat gold stood at Rs 1,21,113 during the day’s trade.
Analysts attributed the decline to cooling trade tensions between the U.S. and China and the dollar index climbing to its highest level in three months. “After a sharp rally, gold and silver lost some shine last week,” analysts noted.
Adding to the bearish sentiment, reports said Beijing’s decision to end a long-standing tax rebate for certain retailers could dampen gold demand in China, one of the world’s largest bullion markets.
Despite the correction, gold remains more than 50 percent higher year-to-date, driven largely by central bank purchases and persistent safe-haven buying earlier in the year. Silver prices, too, have seen a sharp pullback after touching festive-season highs of around Rs 2 lakh per kilogram during the Dhanteras period. The IBJA listed silver at Rs 1,49,660 per kilogram.
Rahul Kalantri, Vice President of Commodities at Mehta Equities Ltd., said the recent drop is likely temporary. “Rising U.S. bond yields above 4 percent further weakened investor appetite for safe-haven assets. Fed Chair Jerome Powell’s comments that rate cuts in December aren’t guaranteed also dampened sentiment. However, consistent central bank purchases and lingering global economic uncertainties continue to offer underlying support to bullion prices,” he said.
Technical analysts pegged gold’s support levels at Rs 1,20,870 to Rs 1,20,480 and resistance between Rs 1,21,890 and Rs 1,22,300. Silver is expected to find support at Rs 1,47,450 to Rs 1,46,750 and face resistance in the Rs 1,49,340 to Rs 1,50,280 range. (Source: IANS)
