Gold Prices Extend Losing Streak for Third Day; Silver Slides Over ₹6,600 Per Kg
Bullion Market Under Pressure as Investors Shift Focus to Equities Amid Strong Market Sentiment
Gold and silver prices witnessed a sharp decline in the domestic bullion market on Thursday, extending their recent downward trend. Gold prices fell for the third consecutive session, while silver recorded a significant drop of more than ₹6,600 per kilogram. Market experts attributed the decline to stronger investor interest in equities, a firmer rupee, and changing expectations surrounding U.S. monetary policy.
The correction in precious metal prices comes despite a modest recovery in international bullion markets, highlighting the impact of domestic factors on investor sentiment.
Gold Drops Below ₹1.54 Lakh Per 10 Grams
According to market data released by the bullion trade body, the price of 99.9% purity gold declined by ₹960 and settled at ₹1,53,440 per 10 grams, including taxes. In the previous trading session, the yellow metal had closed at ₹1,54,400 per 10 grams.
The latest fall marks the third straight day of losses for gold, reflecting subdued demand in the local market. Traders noted that many investors have shifted their attention toward equities as stock markets continue to trade near higher levels.
The decline has also been supported by improved risk appetite among investors, reducing the demand for traditional safe-haven assets such as gold.
Silver Witnesses Steeper Correction
Silver prices experienced even greater selling pressure during the session.
The white metal dropped by ₹6,660 and closed at ₹2,48,740 per kilogram, including taxes. A day earlier, silver had settled at ₹2,55,400 per kilogram.
The sharp correction in silver prices reflects profit-booking by traders and a temporary reduction in demand amid improving sentiment across broader financial markets.
Despite the domestic decline, international silver prices remained relatively stable, indicating that local market factors played a significant role in the price movement.
Strong Equity Markets Reduce Bullion Demand
Analysts believe that the recent strength in Indian stock markets has contributed significantly to the weakness in gold and silver prices.
As investors seek higher returns from equities, capital is gradually moving away from safe-haven assets. At the same time, a stronger rupee against the U.S. dollar has reduced the cost of importing precious metals, adding further pressure on domestic prices.
The combination of robust stock market performance and currency appreciation has limited the appeal of bullion as an investment option in the short term.
U.S. Federal Reserve Signals Influence Market Sentiment
Global bullion markets are also reacting to developments surrounding U.S. monetary policy.
Market participants closely monitored the latest signals from the U.S. Federal Reserve regarding future interest rate decisions. Analysts suggest that expectations of a resilient U.S. economy and the possibility of another rate increase later in the year have weighed on gold prices.
Higher interest rates generally reduce the attractiveness of non-yielding assets such as gold because investors can earn better returns from interest-bearing investments.
According to commodity market experts, the Federal Reserve's policy outlook has created uncertainty in precious metal markets, leading to increased volatility.
International Gold and Silver Prices Show Modest Gains
While domestic bullion prices moved lower, international markets displayed a slightly different trend.
Spot gold was trading around $4,266.47 per ounce during overseas trading hours, reflecting a mild increase. Silver also gained momentum internationally, rising approximately 0.38% to trade near $68.17 per ounce.
Global investors continued to monitor geopolitical developments, including reports of progress in diplomatic discussions involving the United States and Iran. Such developments often influence demand for safe-haven assets and can affect bullion prices worldwide.
What Should Investors Do?
Financial experts advise long-term investors not to make decisions based solely on short-term price fluctuations. Gold continues to play an important role as a portfolio diversifier and inflation hedge, while silver remains a key industrial and investment metal.
For investors planning fresh purchases, the recent correction may offer an opportunity to accumulate gradually through systematic investment strategies rather than making large lump-sum investments.
Outlook for the Bullion Market
The near-term direction of gold and silver prices will likely depend on several factors, including global interest rate expectations, currency movements, geopolitical developments, and investor sentiment toward equities.
If stock markets continue to attract strong inflows and the U.S. Federal Reserve maintains a hawkish stance, bullion prices may remain under pressure. However, any increase in economic uncertainty or geopolitical tensions could revive demand for precious metals.
For now, both gold and silver remain in a corrective phase, with investors closely watching domestic and international developments for the next major price trigger.
