Gold Prices Dip Sharply; Global Trends, Dollar Weakness Influence Market Sentiment
GG News Bureau
Mumbai, 10th June: Gold prices witnessed a sharp drop on Tuesday, falling by ₹738 per 10 grams to trade at ₹96,435 in the domestic market. Silver too saw a decline in July futures, dipping by ₹499 or 0.47% to settle at ₹1,06,588 per kilogram. The drop comes a day after gold showed strength in global markets due to a weakening US dollar and continued safe-haven demand.
Globally, spot gold rebounded by 0.8% to $3,335.02 per ounce after hitting a one-week low earlier on Monday, while US gold futures edged up 0.2% to close at $3,354.90. A key factor behind this recovery was the fall in the US dollar index by 0.3%, making gold cheaper and more attractive for international buyers. This decline in the dollar is largely attributed to weakening bond yields and improving risk appetite in equities.
Meanwhile, the resumption of trade negotiations between the US and China in London added a layer of uncertainty for markets. While a breakthrough in talks could dampen the appeal of gold as a safe haven, analysts believe that broader macroeconomic conditions—such as slowing global growth, anticipated interest rate cuts, and persistent inflation—are keeping demand for gold intact.
Bart Melek, Head of Commodity Strategies at TD Securities, noted, “A weaker economy, likely interest rate cuts, and lower momentum on the risk appetite side is getting people to move into gold… and of course expectations of higher inflation.”
Geopolitical tensions also continue to fuel gold’s appeal. Russia’s military operations in Ukraine’s Dnipropetrovsk region, under the pretext of establishing a “buffer zone,” have contributed to renewed safe-haven buying.
Investors are also eyeing the US Consumer Price Index (CPI) data, set to be released on Friday. The data could offer key insights into the Federal Reserve’s monetary policy trajectory. Additionally, China’s central bank has extended its gold purchases into a seventh consecutive month in May, further reinforcing bullish sentiment around the precious metal.
On the currency front, the USD-INR June futures contract slipped by 0.06% to close at 85.7175 on the NSE. The Indian rupee gained strength amid foreign portfolio investment inflows and positive domestic equity performance, buoyed by recent RBI rate cuts.
Experts predict continued volatility in the dollar index, likely fluctuating between 96.80 and 101.35, while the rupee may trade within the 84.40–86.80 range for the week.
City-wise Gold Prices (per gram on June 10, 2025):
- Mumbai: ₹9,758 (24K), ₹8,945 (22K)
- Delhi: ₹9,773 (24K), ₹8,960 (22K)
- Chennai: ₹9,758 (24K), ₹8,945 (22K)
- Kolkata: ₹9,758 (24K), ₹8,945 (22K)
- Bengaluru: ₹9,758 (24K), ₹8,945 (22K)
- Pune: ₹9,758 (24K), ₹8,945 (22K)
Despite short-term dips, analysts remain optimistic about the long-term outlook for gold, driven by economic and geopolitical factors that continue to shape investor behaviour.
