Gold prices fell over 2 percent in volatile trading on Monday, as investors sold off positions amid a broader equities selloff. Spot gold dropped 2 percent to $2,393.66 per ounce by 1139 GMT (0400 IST), while U.S. gold futures fell 1.4 percent, closing at $2,434.10.
The broader market turmoil saw Japanese stocks tumble, surpassing losses from the 1987 Black Monday. This decline was driven by increasing fears of a U.S. recession, which led investors to offload riskier assets. Recent data showing a rise in the U.S. unemployment rate to 4.3 percent in July has raised expectations that the Federal Reserve might cut interest rates by up to 50 basis points in September.
Despite gold being traditionally seen as a safe-haven asset that benefits from lower interest rates, the current market sentiment has pushed bullion prices down. Other precious metals also saw declines: spot silver fell 5.7 percent to $26.92 per ounce, platinum decreased 4.1 percent to $918.35, and palladium dropped 4.5 percent to $849.05, marking its lowest level since August 2018. The metals are under pressure due to concerns about the long-term risks of transitioning to net zero emissions.
Locally, gold prices rose by Rs 250 to Rs 72,800 per 10 grams, driven by increased demand from jewelers, up from Rs 72,550 per 10 grams previously. Silver prices continued to fall for the third consecutive day, dropping Rs 1,300 to Rs 84,200 per kg due to reduced demand from coin makers and industrial units, down from Rs 85,500 per kg.
Gold of 99.5 percent purity increased by Rs 250 to Rs 72,450 per 10 grams, up from Rs 72,200 per 10 grams in the previous session. Internationally, Comex gold traded at $2,461.10 per ounce, down $8.70 from the previous close. Silver was quoted lower at $27.47 per ounce in New York.
On the Multi Commodity Exchange (MCX), gold futures for October delivery fell by Rs 309 or 0.44 percent to Rs 69,480 per 10 grams, hitting an intra-day low of Rs 69,453 per 10 grams. Silver contracts for September delivery also declined, dropping by Rs 2,719 or 3.3 percent to Rs 79,774 per kg on the MCX.
