Gold Plummets Below ₹1.5 Lakh as Rate Fears Spark Sharp Profit Booking Rally Reversal

Gold Plummets Below ₹1.5 Lakh as Rate Fears Spark Sharp Profit Booking Rally Reversal​

Domestic gold prices fell below the ₹1,50,000 per 10-gram mark on Wednesday, June 10. The decline occurred as traders actively booked profits in anticipation of crucial US inflation data. This movement is underpinned by market concerns that sustained high inflation levels could force central banks to keep interest rates elevated for an extended period.

Sharp Correction Sees Gold Fall Amid Macro Focus​

The price of 24-karat gold traded at ₹1,47,489 per 10 grams on the MCX during the session. This registered a significant drop of more than ₹3,500 in a single trading session. The downturn marks a sharp reversal, representing a 9 percent decline from its recent peak of ₹1,64,500 per 10 grams recorded on May 13.

Analysts note that the rapid spike witnessed earlier was heavily influenced by policy rather than fundamental market strength. Jateen Trivedi, VP Research Analyst (Commodity & Currency) at LKP Securities, stated that the initial rally following the government’s import duty hike largely reflected higher domestic costs. The price action has since corrected as markets realign their focus to global macroeconomic factors.

Global Interest Rate Concerns Drive Sell-Off​

The current decline is primarily attributed to a stronger US dollar, supported by robust economic indicators in the United States. This data reinforced expectations of prolonged high interest rates globally. Elevated bond yields have subsequently reduced the attractiveness of non-yielding assets like gold.

Market experts view this correction as a necessary retracement from the duty-driven spike. While the import duty hike had initially pushed gold close to the ₹1,65,000 target, that move was viewed as largely policy-driven. Spot gold prices had previously closed below the ₹1.50 lakh mark on May 11, settling at ₹1,49,942 per 10 grams on the NSE.

Investment Outlook: Key Levels and Strategy​

Market experts provide clear guidance regarding the near-term movement of the precious metal. The next critical support level for gold is estimated by experts to be around ₹1,45,000 per 10 grams. Meanwhile, ₹1,55,000 remains a major resistance level on the upside.

Hareesh V, Head of Commodity Research at Geojit Investments Limited, explained that sentiment is likely to remain weak as long as prices stay below the ₹1,55,000 threshold. However, he added that this market decline presents an opportune moment for investors. The advisable strategy involves accumulating gold through a staggered SIP approach or by buying on any dips.