Why Did Gold Prices Drop Over Rs 400 Amid US Tariff Uncertainties?
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Synopsis
Gold and silver prices are under pressure due to uncertainties around US tariffs. The latest data shows a significant drop in both precious metals, raising questions about market trends and future predictions. Stay informed about these fluctuations as they impact investors and the economy.
Key Takeaways
- Gold prices decreased by over Rs 400.
- Silver prices fell by more than Rs 1,000.
- 24-carat gold is currently priced at Rs 96,596.
- Central bank purchases of gold are exceeding 1,000 tonnes per annum.
- Investor sentiment is cautious due to trade uncertainties.
New Delhi, July 7 (NationPress) Gold prices experienced a decline of over Rs 400 on Monday due to ongoing uncertainties regarding the US reciprocal tariffs, with silver also witnessing a drop of more than Rs 1,000.
The price for 24-carat gold settled at Rs 96,596, marking a reduction of Rs 425 from the previous day's closing price of Rs 97,021, according to the latest data from the India Bullion and Jewellers Association (IBJA).
Data indicates that silver was priced at Rs 106,531 per kg, down Rs 1,049 from the last day's price of Rs 107,580.
Gold prices have slightly decreased following recent ceasefire announcements and stronger-than-expected US economic data.
“Nevertheless, with central bank gold purchases exceeding 1,000 tonnes annually, and inflation rates remaining higher than the Federal Reserve's expectations,” stated Sandip Raichura, CEO of Retail Broking and Distribution and Director at PL Capital.
Meanwhile, the future contract set to expire on August 5 saw a decrease of Rs 487 or 0.5 percent, settling at 96,503.0 per 10 grams compared to the previous day's price of Rs 96,990 on the Multi Commodity Exchange (MCX).
In tandem, Comex gold fell by 0.93 percent or $31.10 to $3,311.80 per ounce.
“Gold prices remained in a weak range near Rs 96,650, down approximately Rs 350, as Comex gold dropped to $3,310 amid cautious market sentiment,” noted Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities.
The impending expiry of the US trade tariff extension timeline is keeping uncertainty around global trade deals at the forefront. Analysts suggest that expectations for a possible extension are putting slight pressure on gold.
Additionally, due to investor reluctance regarding the interim India-US trade agreement, the Indian stock market closed flat on Monday.
The Sensex concluded the day at 83,409.68, gaining just 9.61 points, or 0.01 percent. The Nifty ended the session unchanged at 25,461.30, up by just 0.30 points.
Point of View
I believe it's crucial to stay updated on the fluctuations in precious metal prices, especially given their impact on both investors and the economy. The current situation underscores the importance of understanding global trade dynamics and their effects on local markets.
NationPress
14/07/2025
Frequently Asked Questions
What caused the recent drop in gold prices?
The drop in gold prices was primarily due to uncertainties regarding US reciprocal tariffs and overall cautious market sentiment.
How much did silver prices fall?
Silver prices fell by over Rs 1,000, closing at Rs 106,531 per kg.
What is the current price of 24-carat gold?
The current price of 24-carat gold is Rs 96,596.
What are experts saying about gold buying trends?
Experts indicate that central banks are buying gold at a rate exceeding 1,000 tonnes per year, which may influence future price stability.
How did the Indian stock market react to these changes?
The Indian stock market closed flat on Monday, reflecting investor hesitancy regarding the interim India-US trade agreement.
