Synopsis
There was a continuous rise in gold prices for the last eight weeks, due to which demand for a safe investment, a weak dollar, and strong local demand were seen. In the bull phase from 7 December 2024 to 22 February 2025, gold prices increased by about 12% i.e. more than ₹ 10,000 per 10 grams.
However, gold prices declined by more than 1% this week, which happened for the first time in the last nine weeks. On Saturday, 24-carat gold was trading at ₹86,620 per 10 grams in major Indian cities, ₹1,150 lower than last week. Whereas, 22-carat gold was being sold at ₹79,400 per 10 grams, which is ₹1,050 less every week.
The price of 24-carat gold decreased from ₹87,920 per 10 grams to ₹86,770 per 10 grams in Delhi markets. Whereas, 22-carat gold fell from ₹80,600 per 10 grams to ₹79,550 per 10 grams.
Gold made a new record this week, then declined again
Gold prices set a new all-time high this week, but have declined over the past three days. The week started on a strong note, with gold rising ₹100 on Monday amid global cues. On Tuesday, gold gained ₹220 to hit an all-time high of ₹88,090 per 10 grams for 24 carats. At the same time, the price of 22-carat gold reached an all-time high of ₹80,750 per 10 grams in Mumbai and other major cities.
Due to profit booking at a record level on Wednesday, gold fell by ₹270 to ₹87,820 per 10 grams. Prices continued to fall on Thursday and Friday as retail demand was hit by higher prices. Gold fell by ₹440 on Thursday and by ₹540 on Friday to reach ₹86,840 per 10 grams, the lowest since February 17.
Gold prices in the global market
Even in the international market, gold fell by more than 2% this week and traded below $2,900 an ounce on Friday. On Tuesday, gold reached a record high of $2,954 an ounce, but closed the same day lower. It fell more than 1% on Thursday and dropped another 0.34% on Friday to $2,863.46 an ounce.
Silver declined by more than 3%
This week, silver prices witnessed a huge fall of 3% or ₹3,500 per kg due to weak demand. The price of silver on Saturday was ₹97,000 per kg, compared to ₹1,00,500 last week. Silver started with gains of ₹500 on Monday and remained flat at ₹1,01,000 per kg on Tuesday. However, it fell by ₹3,000 on Wednesday due to weak demand and US policies to promote fossil fuels.
On Friday, silver fell by ₹1,000 further to ₹97,000 per kg in major Indian cities.
Pressure on gold due to the strengthening dollar and trade uncertainty
This week the US dollar strengthened to the level of 107 as the US economy showed strong data and the possibility of rising inflation. Experts believe that the Federal Reserve may postpone cutting interest rates to control inflation.
The US dollar reached a high of 107.39 on Friday after Donald Trump threatened to impose new tariffs against Europe and China. Dollar strength took the shine off gold as investors awaited US PCI index data for more clarity on the Fed’s interest rate policy.
The US dollar strengthened on trade war concerns, prompting investors to book profits, even as US bond yields remained steady. Profit-booking also affected expectations of gold soon reaching $3,000 per ounce.
Prices affected due to weak domestic demand
On Friday, gold prices also saw a decline due to weak domestic demand. There is a possibility of a decline in demand during the wedding season, as there are less auspicious marriage times in March. As per the Hindu calendar, there are only five auspicious days for marriage in March 2025.
