Gold Drops Rs 600 as Domestic Demand Weakens
Indian gold prices fell by 600 rupees per 10 grams on Thursday. Weak local buying pressure drove the decline despite a global price recovery.
Gold prices in the national capital dropped by 600 rupees per 10 grams on Thursday. The metal closed at 155,600 rupees per 10 grams for 99.9 percent purity. This marks a decline from the previous closing price of 155,600 rupees. Local traders cited weak domestic demand as the primary driver for the price drop.
Silver prices remained stable at 2.42 lakh rupees per kilogram. This price includes all applicable taxes. The contrast between the two metals highlights specific pressure on gold. Market participants noted that retail appetite for the yellow metal has softened significantly.
Federal Reserve signals restrictive stance
The US Federal Reserve raised its benchmark interest rate by 25 basis points. The new rate range is 3.75 to 4 percent. This is the first rate increase in three years. The move was widely expected by market analysts.
Fed Chair Kevin Warsh emphasized persistent inflationary pressures. Stronger-than-expected August core inflation data reinforced this view. Analysts from HDFC Securities noted the hawkish policy message. They stated that this tone weighed on gold prices alongside local demand issues.
Global markets show mixed signals
Spot gold rose 52.85 dollars on Thursday. The price reached 4,317.11 dollars per ounce. This represents a 1.24 percent increase. Silver also gained nearly 2 percent to reach 64.06 dollars per ounce.
Treasury yields pulled back slightly from their recent highs. Crude oil prices and the dollar index also declined. Mirae Asset Sharekhan noted that this cooling in yields provided support to bullion. The recovery in global prices did not offset the domestic drop in India.
Inflation outlook drives policy expectations
Treasury yields had touched their highest level since 2024. This occurred following the recent rate hike. Anand Rathi Share and Stock Brokers noted that the yield pullback is key. They stated that this factor gives gold some breathing room in global markets.
The Fed’s median rate outlook for end-2026 moved up to 4.1 percent. This is an increase from the previous 3.8 percent projection. Analysts believe this hints at further hikes. The focus remains on inflation as the central economic concern.
According to GN auto markets/commodities: gold demand, the divergence between global and local prices is notable. International markets are recovering due to yield changes. Domestic Indian markets are driven by weak consumer demand. These two factors create a complex trading environment for investors.
