Gold prices saw a sharp decline of Rs 1,800, falling to Rs 95,050 per 10 grams in Delhi on Thursday. This significant drop was attributed to a decrease in precious metal rates in overseas markets, as reported by the All India Sarafa Association.
The price of gold with 99.5% purity also slumped by Rs 1,800 to Rs 94,600 per 10 grams. On Wednesday, gold of 99.9 and 99.5% purity had closed at Rs 96,850 and Rs 96,400 per 10 grams, respectively.
"Gold prices are declining as investors move away from safe-haven assets. The recent agreement between the US and China to reduce tariffs for 90 days has eased fears of a full-scale trade war," Chintan Mehta, chief executive officer at Abans Financial Services, said.
He further added that "as uncertainty fades, investors are shifting towards riskier assets, leading to a drop in short-term demand for gold".
According to Axis Securities, the decline in bullion prices was further supported by the stabilisation of geopolitical risks, notably the easing of India-Pakistan tensions and increasing optimism regarding potential US sanctions relief on Syria.
"Gold prices declined in the wake of easing geo-political risk in the global market," noted Pranav Mer, vice president, EBG of Commodity and Currency Research at JM Financial Services.
Looking ahead, Mer noted that "investors will be focussing on Russia-Ukraine peace talks, US macroeconomic data such as producer inflation, jobless claims and US Federal Reserve Chair Jerome Powell's speech later in the day, which could provide more impetus on the future trajectory for bullion prices".
Following the trend in gold, silver prices continued their losing streak for the fourth consecutive day, declining by Rs 1,000 to Rs 97,000 per kg. In the previous session, the white metal had settled at Rs 98,000 per kg.
(With inputs from PTI)
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