Gold posts third straight weekly decline; Indian cities mirror global weakness

Gold entered the weekend on a cautious note, capping a week marked by persistent selling pressure and subdued investor sentiment. The precious metal recorded its third consecutive weekly decline as traders reassessed expectations for US interest rates, monitored developments in the Middle East, and responded to a stronger US dollar.The dominant factor influencing gold this week was the US Federal Reserve’s latest policy stance. While the Fed left interest rates unchanged, policymakers signalled that inflation risks remain and that borrowing costs may stay elevated for longer than markets had previously anticipated. Gold, which does not offer any interest income, tends to become less attractive when interest rates remain high because investors can earn better returns from interest-bearing assets such as bonds and deposits. As a result, expectations of prolonged higher rates triggered selling across bullion markets.Closely linked to the Fed’s position was the movement in the US dollar. The dollar strengthened during the week as investors sought safety in the world’s reserve currency and adjusted their expectations for future rate cuts. A stronger dollar generally makes gold more expensive for buyers using other currencies, reducing international demand and putting downward pressure on prices. The appreciation of the greenback therefore amplified the bearish impact of the Fed’s messaging.Another key factor was the easing of geopolitical concerns that had previously supported gold prices. For much of the year, tensions in various parts of the world had encouraged investors to move money into safe-haven assets. However, reports suggesting a reduction in immediate geopolitical risks, particularly in parts of the Middle East, weakened the urgency for such defensive positioning. As fears moderated, some investors shifted capital away from gold and back into riskier assets such as equities.Profit-booking also emerged as an important theme. Gold had rallied strongly over the past several months and had repeatedly touched record highs earlier this year. Following such a sharp rise, many traders chose to lock in gains, especially after the metal failed to sustain momentum above key resistance levels. The resulting wave of profit-taking accelerated the correction already underway.Physical demand provided only limited support. In major consuming markets such as India, lower prices attracted some buying interest from jewellers and retail consumers. However, demand remained restrained because many buyers expected prices to fall further or become more stable before making significant purchases. This wait-and-watch approach prevented physical buying from offsetting the weakness in investment demand.India price trendThe yellow metal prices across major Indian cities remained under pressure on Saturday, mirroring the weakness in global bullion markets. Retail prices of 24-carat gold hovered around ₹1.45 lakh-₹1.46 lakh per 10 grams, while 22-carat gold traded near ₹1.33 lakh-₹1.34 lakh per 10 grams in most metropolitan centres. Chennai continued to quote slightly higher prices than cities such as Mumbai, Delhi, Bengaluru and Hyderabad, reflecting local demand and market dynamics.



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