NEW DELHI — Gold prices declined Rs 1,000 to Rs 98,400 per 10 grams in the
national capital on Monday amid weak global trend, according to the All India
Sarafa Association.
The precious metal of 99.9 per cent purity had closed at
Rs 99,400 per 10 grams on Thursday.
Gold of 99.5 per cent purity depreciated Rs 1,000 to Rs
97,900 per 10 grams against the previous close of Rs 98,900 per 10 grams.
"Gold prices continued to decline as easing US-China
trade tensions boosted investors' risk appetite, reducing demand for safe-haven
assets like bullion while a stronger dollar added downward pressure on
gold," Abans Financial Services' Chief Executive Officer Chintan Mehta
said.
On Friday, China announced it would exempt some US
imports from its steep 125 per cent tariffs, though it denied that any formal
trade talks were underway.
Meanwhile, the US Federal Reserve officials signalled
that they see no immediate need to adjust monetary policy, choosing instead to
monitor the economic impact of the Trump administration's tariffs.
This hawkish stance suggests that interest rate cuts may
not materialise in the near term, further weighing on gold, which typically
loses appeal as a non-yielding asset when interest rates stay elevated.
Mehta further said, "Rising geopolitical tensions
could limit gold's downside. As war risks escalate and new conflicts emerge,
investors are likely to seek refuge in gold."
"With tensions brewing among major powers, and
regional strains like the growing friction between India and Pakistan, demand
for gold as a safe-haven asset is expected to rise, making it a preferred hedge
against market volatility and uncertainty," he added.
The local bullion markets were closed on Friday due to
traders' protest against the terror attack in Jammu and Kashmir's Pahalgam.
Additionally, silver prices also plunged Rs 1,400 to Rs
98,500 per kg on Monday. The white metal had settled at Rs 99,900 per kg in the
previous session.
On the global front, spot gold fell nearly 1 per cent to
trade at USD 3,291.04 per ounce.
"Gold traded weak amid the US opening tariff talks
with multiple nations and growing expectations of a possible China-US trade
agreement according to US President Donald Trump. Additionally, optimism around
a potential Russia-Ukraine peace deal further weighed on safe-haven demand for
gold," Jateen Trivedi, VP Research Analyst of Commodity and Currency at
LKP Securities, said.
Spot silver in the Asian market hours traded 0.2 per cent
lower at USD 33.05 per ounce.
According to HDFC Securities' Senior Analyst of
Commodities Saumil Gandhi said this week traders expect the spotlight will be
mostly on tariff-related developments.
On the macroeconomic front, US data release such as
manufacturing PMI data for April, GDP data, and, most importantly, US non-farm
payrolls and unemployment rates will impact the bullion market, Gandhi said.
