Gold prices in India witnessed a sharp decline on Tuesday, falling by Rs 600 to Rs 1.55 lakh per 10 grams, as US President Donald Trump rejected Iran's peace proposal, boosting risk appetite among investors. The drop in gold prices came amid a broader market sentiment shift towards riskier assets, with equities gaining ground.
Gold Futures and Spot Prices
On the Multi Commodity Exchange (MCX), gold futures for delivery in December fell by Rs 600, or 0.39%, to trade at Rs 1.55 lakh per 10 grams. Similarly, silver futures for December delivery declined by Rs 1,200, or 0.74%, to Rs 46,500 per kilogram. In the international market, spot gold prices edged lower by 0.3% to around $2,650 per ounce, while US gold futures dipped to $2,668 per ounce.
Trump Rejects Iran Peace Proposal
The decline in gold prices was triggered by US President Donald Trump's rejection of Iran's peace proposal, which had earlier raised hopes of de-escalation in the Middle East. Trump stated that the proposal was not acceptable and that the US would continue its maximum pressure campaign against Iran. This development reduced safe-haven demand for gold, as investors turned to riskier assets like equities.
Market Reaction and Analyst Views
Analysts noted that the rejection of the peace proposal led to a temporary shift in market sentiment, with gold prices retreating from recent highs. However, they cautioned that geopolitical tensions remain elevated, which could support gold prices in the medium term. The dollar index also strengthened, putting additional pressure on gold prices.
Domestic Gold Rates in Key Cities
Here are the gold rates (22/24 carat) in major Indian cities as of November 12, 2024:
- Delhi: 24 carat - Rs 1,55,000/10g, 22 carat - Rs 1,42,000/10g
- Mumbai: 24 carat - Rs 1,54,900/10g, 22 carat - Rs 1,41,900/10g
- Chennai: 24 carat - Rs 1,55,500/10g, 22 carat - Rs 1,42,500/10g
- Kolkata: 24 carat - Rs 1,54,800/10g, 22 carat - Rs 1,41,800/10g
Outlook for Gold
Market participants will closely monitor further developments in US-Iran relations and the upcoming US economic data for cues on the Federal Reserve's monetary policy stance. A potential rate cut could provide support for gold prices, while any further escalation in geopolitical tensions may push prices higher. For now, gold remains under pressure from a stronger dollar and improved risk appetite.
