Gold prices have seen mixed trends recently, with prices falling in India but rising globally. In India, gold prices fell to Rs 74,740 per 10 grams at 11:40 am, according to the India Bullion and Jewelers Association.

This represents a drop of almost Rs 1,000 compared to last Monday, bringing prices closer to the lowest recorded in September. However, globally, gold prices have increased slightly due to geopolitical and economic factors.

Gold prices rose on Monday after last week’s sharp losses, as the dollar’s rally slowed. Investors are now focusing on upcoming remarks from Federal Reserve officials to gain insight into the future trajectory of U.S. interest rates. Spot gold prices edged up 1% to $2,587.49 an ounce after a turbulent week, which saw the biggest decline in years. U.S. gold futures also showed a modest recovery, rising 0.9% to $2,592 an ounce.

WHY IS GOLD CHEAPER IN INDIA?

Weakening local demand – The Indian gold market has seen a decline in prices despite increased physical demand. Gold premiums rose to $16 an ounce from $3 last week, indicating higher retail buying during the wedding season. However, the overall decline in global gold prices has offset local demand pressures.

Affordability for Indian Buyers – The drop in prices has made gold more accessible to Indian consumers, encouraging buyers who have postponed purchases for the festive season due to high rates. While this supports retail demand, it was not enough to reverse the downward trend.

Global economic impact – The strength of the U.S. economy has kept interest rates high, reducing the appeal of non-yielding assets like gold. This global influence has also weighed on Indian gold prices.

WHY GOLD PRICES ARE INCREASING GLOBALLY

Request for refuge in times of conflict – Escalating geopolitical tensions, particularly in the Middle East, have increased gold’s appeal as a safe haven. This has driven up prices in regions like the Gulf countries, where demand for gold typically increases in times of uncertainty.

Regional purchases and economic factors – Countries like Qatar and Oman are experiencing increased demand for gold due to retail and institutional purchases. The traditional preference for gold as a safe investment in times of volatility has further supported prices in these regions.

Import costs and currency fluctuations – Exchange rate differences and higher import costs have contributed to higher gold prices in other regions. Local taxes, market conditions and logistical challenges also add to the disparity between Indian and global rates.

FUTURE PROSPECTS

“New geopolitical tensions will overshadow “Trumponomics” and precious metals prices will rebound again this week. Gold prices have reached a short-term bottom now and are expected to rebound towards Rs 75,000 and Rs 77,000 and that of silver towards Rs 92,000 and Rs 95,000,” said Dr Renisha Chainani, Director of Research – Augmont – Gold For All.