Gold prices dropped down from Tuesday’s record-high levels of ₹1.12 lakh-mark per 10 grams to trade below the ₹1.09 lakh-mark per 10 grams in the domestic futures market on Wednesday, as US-India trade talks seemed to be back on track, prompting investors to book profits at elevated levels.
Additionally, market participants said softer-than-expected US jobs data has raised concerns over the strength of US’s economy, triggering traders to turn cautious ahead of key inflation readings that will emerge later this week. The data will provide more cues on whether the US Federal Reserve will cut interest rates next week.
On the MCX, gold futures for October delivery declined ₹203, or 0.19 per cent, to ₹1,08,830 per 10 grams in a business turnover of 17,442 lots on Wednesday. The most-traded precious metal contract had surged to an all-time high of ₹1,09,840 per 10 grams on Tuesday.
Similarly, the far-month gold futures for December delivery eased ₹249, or 0.23 per cent, to ₹1,09,839 per 10 grams in 5,069 lots. On Tuesday, the yellow metal had breached the ₹1.10 lakh per 10 grams level for the first time ever before paring gains.
Also Read: Gold rallies ₹5,080, hits fresh peak of ₹1.12 lakh
Commodity market experts said the correction in gold prices came after a huge rally that had lifted the precious metal to historic peaks. The profit-taking came against the backdrop of bearish sentiment in the overseas markets which weighed on the metal.
Meanwhile, US President Donald Trump said on Tuesday that the US and India are making progress in trade talks, striking an optimistic note as he prepares to speak with Prime Minister Narendra Modi in the coming weeks.
Responding to Trump's remarks, PM Modi said in a post on X that India and the United States are "close friends and natural partners" and expressed confidence that the trade negotiations would help unlock the "limitless potential" of the India-US partnership.
Globally, Comex gold futures went down to USD 3,679.02 per ounce. It had surged to hit a lifetime high of USD 3,715.20 per ounce on Tuesday.
With gold prices soaring nearly 40 per cent so far this year, they have breached the USD 3,700 per ounce mark, after registering a 27 per cent rise in 2024, stated Renisha Chainani, Head - Research at Augmont.
Dovish monetary policies by major central banks, weakness in the US dollar, robust purchases by central banks across the globe and heightened geopolitical and economic concerns have contributed to boosting the metal's safe-haven appeal.
"Investors will now turn to US producer price inflation data, which is scheduled to released later in the day, and consumer price inflation data on Thursday, which will likely offer stronger indications of the US central bank's monetary policy path and sentiment for the gold prices in the near-term," she said.
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