Gold prices in India witnessed a notable decline on Wednesday, December 31, marking a sharp reversal after a period of significant volatility. The domestic market followed a subdued global trend, with investors adopting a cautious stance while monitoring international developments.
Sharp Decline in MCX Gold Futures
The most active gold futures contract on the Multi Commodity Exchange (MCX) experienced a significant drop. The price fell by Rs 1,140, or 0.8 per cent, from its previous closing level of Rs 1,36,666. During the trading session, it touched an intraday low of Rs 1,35,526. This downward movement came after a strong rally earlier in the week, which was primarily fueled by increased geopolitical tensions.
Global Market Sentiment and Drivers
On the international front, benchmark COMEX gold futures were trading marginally lower. They were seen in the range of $4,350 to $4,360 per ounce, compared to Tuesday's close near $4,386. The market sentiment remained wary as a series of global events influenced safe-haven flows.
Gold and silver had staged a robust rebound on Tuesday from their intraday lows, driven by renewed investor interest in traditional safe assets. This demand was triggered by three key factors:
- Setbacks in the ongoing peace talks between Russia and Ukraine.
- US military strikes on Venezuelan dockyards.
- Chinese naval exercises conducted amid rising tensions between the United States and Taiwan.
City-Wise Gold Rates Across India
Here is a snapshot of gold prices in major Indian cities for December 31, reflecting the day's downward trend:
Mumbai: 24K gold was priced at Rs 13,588 per gram, 22K at Rs 12,455, and 18K at Rs 10,191.
Delhi: The price for 24K gold stood at Rs 13,537 per gram, while 22K cost Rs 12,410 and 18K was Rs 10,157 per gram.
Chennai: Rates were higher here, with 24K gold trading at Rs 13,691 per gram. 22K gold was at Rs 12,550 and 18K at Rs 10,470 per gram.
Bengaluru, Kolkata & Hyderabad: These cities reported identical rates. 24K gold was available at Rs 13,522 per gram, 22K at Rs 12,395, and 18K at Rs 10,142 per gram.
Ahmedabad: 24K gold was priced at Rs 13,527 per gram, 22K at Rs 12,400, and 18K at Rs 10,147.
Jaipur & Kanpur: Both cities saw 24K gold at Rs 13,537 per gram, 22K at Rs 12,410, and 18K at Rs 10,157. In Kanpur, prices declined by Rs 98 for 24K, Rs 90 for 22K, and Rs 51 for 18K gold.
Pune: Mirrored Mumbai's rates at Rs 13,588 per gram for 24K.
Bhubaneswar: Matched Kolkata and Bengaluru with 24K at Rs 13,522 per gram.
Market Outlook and Analysis
The trading activity on Wednesday highlighted the sensitive nature of gold prices to global risk perceptions. While geopolitical flare-ups provided strong support earlier, profit-taking and a wait-and-watch approach led to the correction. Analysts suggest that the fundamental demand for gold as a hedge against uncertainty remains intact, and price movements will continue to be dictated by developments in international conflicts and central bank policies. Investors are advised to monitor these factors closely for short-term direction.
