New Delhi, Oct 6: Gold prices remained under pressure on Tuesday as the precious metal continued to move through a sharp correction from its January peak, with investors closely watching the US dollar, Treasury yields and expectations around the Federal Reserve’s interest-rate policy.
International spot gold was trading around $4,150 per ounce, well below its January peak of nearly $5,595 per ounce. The decline of more than 26 per cent marks one of the steepest corrections in gold prices in recent years, although the fall has taken place in several stages rather than through one continuous decline.
The latest weakness has largely been linked to a firmer US dollar and higher Treasury yields. Since gold does not generate interest income, rising bond yields can make the metal relatively less attractive to investors.
Despite the recent correction, gold continues to retain its appeal as a safe-haven asset. Ongoing geopolitical uncertainties, concerns over global economic conditions and expectations surrounding monetary policy remain important factors that could influence prices in the coming sessions.
In the Indian market, gold prices have also been affected by international bullion trends, currency movements and domestic demand. Retail prices can differ across cities and jewellers depending on taxes, making charges and other costs.
For buyers, the recent fall may provide some relief after the exceptional rally seen earlier this year. However, market participants are likely to remain cautious as gold continues to respond quickly to movements in the dollar, US bond yields and global risk sentiment.
Analysts say the near-term direction of gold will depend largely on whether the dollar and bond yields remain elevated and how expectations for US interest rates evolve. At the same time, continued central-bank demand and geopolitical risks could offer support to the precious metal if investor demand for safe-haven assets strengthens.
