Gold Prices Fall ₹2,700 to ₹1.58 Lakh in Delhi

Gold prices in Delhi fell by ₹2,700 to ₹1,58,200 per 10 grams on Tuesday, marking the fifth consecutive day of decline. The price drop is attributed to a sharp global bullion sell-off, which has put pressure on domestic prices.

The current price is a nearly two-week low, with the last similar price recorded on August 19 at ₹1,58,000. Over the past five sessions, gold prices have lost ₹8,900, or 5.3 percent, from ₹1,67,100 per 10 grams on August 25.

Silver prices also declined sharply, falling by ₹5,000 to ₹2,40,500 per kilogram. The white metal had remained unchanged at ₹2,45,500 per kilogram in the previous session. Domestic prices include all taxes.

Renewed tensions between the US and Iran have led to an increase in crude oil prices, raising inflation concerns and focusing attention on the interest-rate outlook. Global bullion has faced a sell-off, with spot gold dropping by $80.61, or 2 percent, to $4,368.58 per ounce in overseas trade. Silver slid nearly 3 percent to $64.68 per ounce.

According to Praveen Singh of Mirae Asset ShareKhan, gold remains under pressure after US Federal Reserve Chair Kevin Warsh's hawkish Jackson Hole speech kept the possibility of interest-rate increases elevated. Markets are pricing in a 60 percent probability that the US central bank will raise rates at its September 16 Federal Open Market Committee meeting.

Prime Minister Narendra Modi's recent comments, urging consumers to avoid unnecessary gold purchases while promoting Swadeshi and self-reliance, may also weigh on sentiment. However, Vedika Narvekar of Anand Rathi Share and Stock Brokers believes that the remarks are unlikely to significantly influence international prices but could affect domestic sentiment and near-term jewellery demand expectations.

Investors will now track US manufacturing and services activity data due this week, followed by Friday's August non-farm payrolls report, for further signals about monetary policy and the direction of bullion prices over the next several trading sessions.

The decline in gold prices may have significant implications for India's economy, with some experts suggesting that a gold price surge could boost the country's economy by $400 billion in household wealth. However, the current decline may have the opposite effect, potentially affecting domestic sentiment and jewellery demand.

In conclusion, the decline in gold prices is a significant development, with both domestic and international factors contributing to the drop. As investors await further signals about monetary policy, the direction of bullion prices remains uncertain, and the impact on India's economy will be closely watched.