Gold prices declined by Rs 150 to Rs 1,50,650 per 10 grams in the national capital on Monday, while silver tumbled Rs 5,000 per kilogram, as a stronger US dollar and subdued global cues prompted traders to book profits and reduce exposure to precious metals. The 99.9 per cent purity gold had settled at Rs 1,50,800 per 10 grams in the previous trading session.
Silver, meanwhile, snapped a four-session winning streak, falling Rs 5,000 to Rs 2,40,000 per kilogram (inclusive of all taxes) from Friday's closing level of Rs 2,45,000 per kg, according to local market participants.
Traders said bullion prices remained largely range-bound as investors weighed persistent geopolitical tensions in West Asia against the strengthening US dollar and evolving expectations regarding the US Federal Reserve's interest rate trajectory.
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"Gold prices experienced a slight decline in the domestic markets on Monday, as investors navigated the complex landscape of Washington-Tehran relations while awaiting key inflation data from the US," said Gaurav Garg, Research Analyst at Lemonn Markets Desk.
In the international market, spot gold eased to USD 4,160.60 per ounce, while spot silver also traded lower at USD 62.24 per ounce, reflecting cautious investor sentiment. According to Praveen Singh, Head of Commodities at Mirae Asset Sharekhan, the yellow metal came under pressure in overseas markets as the US dollar strengthened, while traders continued to reassess the likelihood of an interest rate cut by the US Federal Reserve later this year.
"The yellow metal has slipped in the overseas trade on a firmer dollar as traders continue to discount an interest rate hike this year by the US Federal Reserve," Singh said. He added that market participants will closely monitor the US ISM Services data for June, along with other key macroeconomic indicators, for fresh clues on the Federal Reserve's future monetary policy stance.
On the outlook, Singh said gold is expected to retain a positive long-term bias, supported by optimism over easing inflationary pressures and weaker-than-expected US labour market data.
However, he cautioned that expectations of the Federal Reserve keeping interest rates elevated for a longer period could cap gains in the precious metal and prevent any significant upside in prices in the near term.
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