Indian Gold and Silver Prices Decline Amid Weak Spot Demand
Gold and silver prices in India have declined due to weak spot demand and reduced investor positions. Silver futures for September delivery fell by Rs 4,023 (1.73%) to Rs 2.28 lakh per kg, with a business turnover of 2,577 lots.
However, the decline in Indian futures prices does not indicate a broad-based global sell-off. In fact, international markets were moving in the opposite direction, with gold futures in New York up 0.10% at around $4,338.74 an ounce and silver gaining 0.99% to $62.74 an ounce.
Gaurav Garg, Head of Research at Lemonn, noted that gold was showing some recovery after the previous session's decline, supported by easing US Treasury yields. However, investors remained cautious ahead of the release of the US Federal Reserve meeting minutes, which could provide clues about the future direction of US interest rates.
US interest-rate expectations remain a key driver for precious metals because lower rates can reduce the opportunity cost of holding non-yielding assets such as gold. Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said that gold is likely to remain volatile as geopolitical developments continue to influence safe-haven demand.
Despite the near-term weakness, gold continues to receive support from geopolitical uncertainty. Higher crude prices and continued uncertainty after the US-Iran MOU ended without fresh talks kept sentiment cautious. The Strait of Hormuz remains a key geopolitical trigger, while markets will also track the FOMC meeting minutes, US jobs data, and crude movements for further direction.
The decline in prices does not necessarily mean that Indian consumers are losing interest in gold. With prices remaining elevated, buyers may simply be changing how they purchase the metal. Some households are opting to exchange or redesign existing jewellery instead of buying fresh gold, allowing them to unlock the value of their existing holdings while reducing the quantity of new gold they need to purchase.