New Delhi, February 28 – Gold prices in the national capital dropped by ₹500, settling at ₹87,700 per 10 grams on Friday, marking a two-week low. The decline was attributed to reduced demand from jewellery traders and selling by investors, as per the All India Sarafa Association.
The 99.9% purity gold had closed at ₹88,200 per 10 grams in the previous trading session. So far in 2024, gold prices have surged by ₹8,310 or 10.5%, compared to ₹79,390 per 10 grams recorded on January 1.
Meanwhile, standard gold (99.5% purity) also witnessed a dip, falling ₹500 to ₹87,300 per 10 grams from Thursday’s closing price of ₹87,800.
Silver Extends Losses for Third Consecutive Day
Silver prices continued their downward trend, plummeting ₹2,100 to ₹96,400 per kilogram, reaching a two-week low. The metal had settled at ₹98,500 per kilogram in the previous session.Factors Behind the Decline
Market analysts attributed the decline in both gold and silver prices to a strengthening US dollar. According to Rahul Kalantri, VP Commodities at Mehta Equities Ltd., "Gold and silver declined once again due to a strong rebound in the dollar index. The US President's announcement of new tariffs on Mexico and Canada, effective March 4, strengthened the dollar, exerting downward pressure on metal prices."Additionally, former US President Donald Trump’s announcement of an additional 10% tariff on China, raising the total rate to 20% on imports, dampened market optimism about a possible delay in these trade levies.
Global and Futures Market Trends
On the Multi Commodity Exchange (MCX), gold futures for April delivery dropped by ₹484 to ₹84,712 per 10 grams.Globally, gold prices on Comex declined by $21.20 per ounce, or 0.73%, to $2,874.70 per ounce. Spot gold also fell by $15 per ounce to $2,862.53 per ounce.
"Gold prices are correcting as the US dollar strengthens, driven by rising US bond yields. This suggests the US Federal Reserve may delay rate cuts due to persistent inflationary pressures," said Chintan Mehta, CEO of Abans Holdings.
According to Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, the recent fall in gold was mainly due to investors booking profits after the metal's record-breaking rally. Furthermore, the dollar index hovered around 107 on Friday, maintaining gains from the previous two sessions and positioning itself for a positive weekly close after three consecutive negative weeks.
In the silver market, Comex silver futures in the Asian session dropped 1.21%, trading at $31.72 per ounce.
With global economic uncertainties and a strong dollar dictating the trajectory of precious metals, investors remain watchful of upcoming geopolitical and monetary policy developments.
