Gold Slides For Sixth Session, Prices Sink ₹2,100

Mumbai experienced a sixth consecutive day of declining gold prices on Wednesday, slipping Rs 2,100 to a three-week low of Rs 1,56,100 per 10 grams, including taxes, as inflation concerns and forecasts of stricter US monetary policy cast a shadow over precious metals. The metal had previously reached its highest level in over three weeks at Rs 1,67,100 on August 25, before a significant drop of Rs 11,000.

Senior Commodities Analyst Saumil Gandhi at HDFC Securities reported that precious metals faced intense selling pressure, with international spot gold hitting its lowest level in more than three weeks, before a slight recovery. Silver, on the other hand, saw another decline, falling for the second consecutive day by Rs 5,000 to a two-week low of Rs 2,35,500 per kilogram, including taxes. On Tuesday, the metal closed at Rs 2,40,500 per kilogram.

Analyst Aamir Makda of Choice Broking attributed the surge in crude oil prices to escalating conflict in West Asia, which reignited inflation and interest-rate concerns, further pressuring silver prices. In overseas markets, spot gold rebounded by USD 25.24, or 0.58 percent, to USD 4,303.12 an ounce, while silver dropped nearly 1 percent to USD 63.64 an ounce.

Head of Commodities at Mirae Asset ShareKhan, Praveen Singh, noted that gold continued to struggle due to fears of potential interest rate hikes by the US Federal Reserve, further exacerbated by surging oil prices and hawkish statements from Federal Reserve Chair Kevin Warsh, who advocated for action if inflation does not subside quickly.

Global gold-backed exchange-traded funds recorded net outflows after seven consecutive sessions of inflows, indicating renewed caution among investors. Vedika Narvekar of Anand Rathi Share and Stock Brokers stated that traders are eagerly awaiting US labor data, which could provide crucial insights into the Federal Reserve's next policy decision and potentially shape the near-term bullion market direction.