Kolkata: Gold and silver prices in India have fallen for a second straight week, dragged down by a stronger dollar and rising US inflation expectations that outweighed safe-haven demand amid the West Asia war.
Gold price fell to about ₹1.51 lakh per 10 grams on Thursday, down 5.03% in the past week, while silver has plunged 12.26% to ₹2.36 lakh per kilogram, helping revive demand in India.
In global markets, gold slipped to around $4,800 per troy ounce and silver near $75.
Analysts attributed the fall to fears of persistent inflation as crude oil prices stay above $100 a barrel amid supply disruptions through the Strait of Hormuz, reinforcing bets that US interest rates will stay elevated.
“Despite ongoing geopolitical tensions, bullion remained under pressure as markets focused on the likelihood of higher-for-longer interest rates amid persistent inflation risks,” said Manav Modi, commodities analyst at Motilal Oswal Financial Services.
Besides shipping route blockade, he also cited attacks on the world’s largest natural gas field shared by Iran and Qatar.
Federal Reserve chair Jerome Powell has flagged oil-driven price pressures, while stronger-than-expected US producer inflation data has further reduced expectations of early rate cuts.
“While the Fed maintains its long-term inflation target of 2%, markets now expect policymakers to remain cautious, limiting upside in gold despite ongoing safe-haven demand,” Modi said. “Yesterday’s better than expected US PPI (producer price index) data also weighed on rate cut expectations.”
Jewellers said the fall in prices are reviving demand in the world’s second-largest gold market, citing stronger footfalls on Gudi Padwa, an auspicious buying occasion in Maharashtra.
“This is a good level to buy gold. Enquiries from customers have already started and we are expecting good footfalls in the weekend,” said Suvankar Sen, managing director and CEO of Senco Gold & Diamonds.
With the wedding season and Akshaya Tritiya approaching, jewellers expect demand to improve if prices stay at current levels.
