Gold prices in India have crashed, following the decrease in crude oil prices and high-yielding US dollar bonds, pushing investor sentiment away from precious metals.
The prices also fell sharply after India’s central bank, the Reserve Bank of India, kept the repo rate unchanged at 5.25 per cent in its latest monetary policy review.
The weakness in domestic prices followed a steep decline in gold prices witnessed in global markets, where gold recorded its biggest single-day fall in more than two months. Some experts believe that gold is heading for a temporary short-term correction that usually takes place in the months of June and July, since the marriage season in India kicks off in late August.
However, after the temporary corrections, gold is expected to stabilise after September and is likely to hover between 4500-4700 dollars per troy ounce in the last half of this year.
On June 6, 24K gold prices dropped by Rs 300 to Rs 15,273 per gram, while 22K gold fell by Rs 275 to Rs 14,000 per gram.
The decline has been particularly pronounced over the past three days, with 24K gold tumbling by as much as Rs 34,900 per 100 grams since June 4.
Overall, the yellow metal remained under pressure throughout the week as investors reassessed the outlook for interest rates and safe-haven assets.
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