Gold Plunges by ₹4,800 as Investors Await US Federal Reserve Decision and Geopolitical Developments

Gold Plunges by ₹4,800 as Investors Await US Federal Reserve Decision and Geopolitical Developments​

Precious metal prices experienced a significant downturn on Wednesday as domestic traders shed caution and decided against holding inventory. Gold plummeted by Rs 4,800, settling at Rs 1,54,400 per 10 grams (inclusive of all taxes). Silver also saw a sharp decline, falling by Rs 5,300 to trade at Rs 2,55,400 per kilogram.

The overall trend was marked by weak domestic demand for the second consecutive day. Investors appear to be prioritizing opportunities in firm equity markets over precious metals amid uncertainty. The sharp fall came after gold had closed the previous session at Rs 1,59,200 per 10 grams.

Global and Domestic Price Slide​

The decline reflected a cautious global sentiment regarding commodity stability. In international exchanges, spot gold traded marginally lower at USD 4,327.54 per ounce. Silver also weakened globally, dipping by 0.18 percent to settle at USD 69.89 per ounce.

The All India Sarafa Association reported the depreciation of the 99.9 percent pure yellow metal. Concurrently, silver prices fell significantly across the board despite the volatility. These downward movements place increased focus on the upcoming international economic events.

Analysts Cite US Economic Uncertainty as Key Driver​

Analysts are observing a highly strategic moment for commodity trading ahead of crucial US policy decisions. Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, noted that investors adopted a cautious approach in light of several important US economic developments. The market is keenly awaiting the outcome of the US Federal Reserve's monetary policy decision due later today.

Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, commented that spot gold is consolidating its position as it awaits the guidance from the US Federal Open Market Committee. This consolidation period suggests traders are waiting for clarity before making significant moves in the metal market.

Geopolitical Developments Loom Over Metal Demand​

Beyond the domestic and economic uncertainties, participants are closely tracking developments surrounding the scheduled meeting between the US and Iran on Friday. Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, elaborated that progress toward a formal agreement could help reduce current geopolitical uncertainty across global markets. Conversely, any setbacks in diplomatic talks could potentially revive demand for precious metals swiftly.