Indian bullion prices dipped marginally this week while the rupee slightly declined compared to the US dollar due to tariff concerns. In the near future, gold is expected to remain volatile within the range of Rs 97,000 to Rs 98,500, analysts said.
The price of 24-carat gold (10 gram) started the week at Rs 98,446 on Monday, rose to Rs 99,017 on Wednesday, and ended the week at Rs 98,534, according to data published by the India Bullion and Jewellers Association (IBJA).
“Gold traded weak by Rs 350 at Rs 97,700 in MCX, tracking softness in Comex gold which hovered near $3290. The decline comes amid pressure from the U.S. Fed’s continued hawkish stance and no indication of near-term rate cuts, which has dampened sentiment for safe-haven assets. Additionally, key U.S. data due later today is keeping participants cautious,” said Jateen Trivedi from LKP Securities.
DSP mutual funds released a report showing that gold has broken past its inflation-adjusted 1980s high in 2024, making a new real peak — while silver remains well below its inflation-adjusted 2011 highs. This divergence may present an opportunity for investors.
“The US’s ability to sustain large trade and fiscal deficits is under strain. This weakens the dollar’s reserve currency status, used for funding U.S. deficits. Gold has emerged as the only credible alternative that attracts reserve flows. While global forex reserves total around $12.5 trillion, the gold market is valued at $23 trillion, 15 per cent of which is held in India. A mere 5 per cent shift of global reserves into gold could trigger a sustained and significant rally in its price. And there is not much Gold to absorb such magnitude of flow,” the report said.
The USD/INR exchange rate fell to 87.19 on Saturday, down 0.34 per cent from the previous session. Over the past month, INR has weakened 1.88 per cent and is down by 4.06 per cent in one year. It continues to remain under pressure from a strong US dollar, with market participants closely monitoring global developments and tariff decisions.
