Gold prices declined in the domestic bullion market on Friday after investors booked profits following the previous trading session's rally, amid rising crude oil prices and escalating geopolitical tensions in the Middle East.
In the domestic market, 24-carat gold fell sharply from the previous session's high, while prices of 22-carat and 18-carat gold also declined. In contrast, silver prices remained firm, with higher domestic demand supporting elevated price levels.
The decline in gold prices comes as the precious metal retreated from recent highs in the international market. Rising crude oil prices, increasing geopolitical tensions in the Middle East, and changing expectations regarding US monetary policy have influenced global market direction.
Domestic 24-carat gold declined by around ₹1,100 per 10 grams from the previous session's high of approximately ₹1,47,280 per 10 grams to around ₹1,46,170 per 10 grams. Similarly, 22-carat gold fell by about ₹1,010 per 10 grams from approximately ₹1,35,000 per 10 grams in the previous trading session to ₹1,33,990 per 10 grams.
The price of 18-carat gold also declined by around ₹830, trading at approximately ₹1,09,630 per 10 grams. Retail gold prices may vary across cities depending on jewellery brands, making charges, and local taxes.
International gold prices also came under pressure after the metal climbed above $4,100 per ounce in the previous trading session, reaching a two-week high. Following profit booking, prices declined by around 1-2%, with gold trading at approximately $4,052.50 per ounce.
According to analysts, investors may sell part of their holdings to book profits after a sharp rise in the price of a safe-haven asset. The recent decline in gold prices is being attributed to such profit booking.
Global developments continue to influence gold prices. Rising tensions in the Middle East and reports of attacks on ships in the Red Sea have contributed to higher crude oil prices. Sustained increases in oil prices could raise global inflation risks, keeping investor attention focused on central bank monetary policy. Expectations of higher interest rates may put pressure on assets such as gold that do not generate regular interest income.
The policy direction of the US Federal Reserve also remains an important factor for gold. Changes in market expectations regarding interest rates can affect the US dollar and bond yields, influencing demand for and prices of gold.
While gold prices declined, silver remained firm. On the Multi Commodity Exchange (MCX), the September silver contract was trading at around ₹2,27,180 per kilogram. In the domestic retail market, silver prices reached approximately ₹2,39,900 per kilogram. Silver is used not only as an investment and jewellery metal but also has significant industrial applications.
