Indian Gold Prices Softens Across Markets Amid Geopolitical Uncertainty, Silver Remains Elevated
Gold prices made a modest correction throughout India on June 17, with retail prices easing after hitting record highs in the previous week. The average price of 24-carat gold was ₹99,370 per 10 grams, with 22-carat gold quoted at ₹98,980. This follows the prices breaching ₹1,01,500 for 24-carat gold on Monday, a brief rally.
In major cities, prices of gold are moving downwards. 24-carat gold was traded at ₹99,780 per 10 grams and 22-carat at ₹91,420 in Mumbai. Delhi quoted 24-carat gold at ₹99,610 and 22-carat at ₹91,290. Rates have eased in sync with international market movements, although domestic demand and stock positions also played a role in weakening it.
Chennai Experiences Steepest One-Day Decline in Gold Rates
Among large metros, Chennai saw the steepest drop. Today, 22-carat gold fell by ₹840 per sovereign (8 grams) to ₹73,600, a low since April's recent high of ₹74,320. The 24-carat gold rate in Chennai was around ₹92,000 per 10 grams. The drop is against price strength in northern cities, indicating regional market variations.
Chennai jewelers reported declining traffic and a risk-averse mood among consumers in the wake of recent price fluctuations. Traders explain the steep decline as a result of plummeting spot demand coupled with conforming to national price directions.
Silver Defies Trend, Holds at Elevated Levels
Whereas gold softened, silver continued on its upswing. Silver prices were close to record highs, with average rates per kilogram coming in at ₹109,800. In certain markets such as Mumbai and Ahmedabad, spot silver was being quoted at ₹107,210 per kg. This is a sustained rally over the last fortnight supported by heightened industrial demand and geopolitics. The divergence of gold and silver indicates divergent investor behavior between precious metals, with silver still drawing interest in the face of weakening gold prices.
Geopolitical risk and global cues propel market volatility
The recent volatility in precious metals tracks events in the Middle East, specifically escalating tensions between Iran and Israel. News media reported that a recent airstrike close to Iran's nuclear facility prompted the escalation of geopolitical tensions into safe-haven assets like gold and silver.
Globally, gold futures rose to more than $2,300 per ounce before they retreated, and silver remained supported above the $29 per ounce level. These trends indicated greater sensitivity to political risk as well as monetary policy speculation in the US.
Indian Bullion Market Tracks Global Trends with Lag
Domestic bullion prices are controlled to a great extent by international benchmarks, rupee-dollar parity and import duty. With the rupee depreciating to more than ₹86 against one USD, import prices for gold have increased, contributing to cost pressures. But June 17's correction indicates a stabilization of speculative buying and a move towards equilibrium pricing.
Jewellers in regions have reported uneven demand, with rural markets reporting relative stability while urban consumers continue to be price-sensitive. The volatility has also affected retail and wholesale bookings in the lead-up to the upcoming festive and wedding seasons.
Precious Metals Outlook Locked to Global Developments
Indian precious metal prices will continue to be sensitive to global financial market trends, monetary policy signals from here and from abroad, and further geopolitical tensions. Although gold has cooled somewhat from record levels, renewed international tensions or a shift in central bank attitude could reinvigorate safe-haven demand.
At the same time, silver's consistent outperformance puts it in the focus of investor interest, especially among those wanting an alternative hedge asset in an uncertain macroeconomic backdrop.
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