Gold prices continued their decline, losing ₹441 per 10 grams to close at ₹1,21,077 amid volatile trading on Monday. Over the past week, the price of gold has dropped by ₹8,507 per 10 grams, or 7 percent, from ₹1,29,584 on October 17, driven by bearish trends in international markets.
In the United States, gold fell by $70 an ounce to $4,040 due to weak demand and reduced trade tensions with China. Despite the current downturn, gold has returned over 55 percent so far this year and is expected to regain strength in light of ongoing geopolitical issues and U.S. tariff tensions with China.
The decline in prices follows strong sales of gold jewelry during the peak Dhanteras and Diwali season in India. Suvankar Sen, Managing Director and CEO of Senco Gold, stated that the decrease in prices offers a timely opportunity for jewelry buyers planning weddings, especially against the backdrop of ongoing global uncertainties.
Jateen Trivedi, Vice President of Research Analysis at LKP Securities, noted that gold prices extended their weakness, falling by ₹1,550 to ₹1,21,900, as optimism regarding a potential U.S.-China trade deal led to profit booking among bullion investors. Renisha Chainani, Head of Research at Augmont, indicated that gold prices have been fluctuating between $4,060 (approximately Rs 120,600) and $4,170 (approximately Rs 124,600) following a significant sell-off, cautioning that a breakout in either direction could lead to a price move of 3-4 percent.
On the international front, Comex gold saw a 1.70 percent drop, while MCX gold experienced a smaller decline of 1.20 percent due to the depreciation of the rupee and a steady dollar index. According to Trivedi, the reduction in global uncertainty has temporarily cooled demand for safe-haven assets, although traders remain vigilant ahead of crucial U.S. inflation data and updates on trade negotiations.
Trivedi anticipates that gold will remain volatile, with support near ₹119,500 and resistance at around ₹124,500. Satish Dondapati, Fund Manager at Kotak Mutual Fund, mentioned that the gold rally, which began in April, was buoyed by expectations of a potential U.S. Federal Reserve rate cut, heightened geopolitical tensions, strong investment demand, and continued central bank purchasing.
In recent weeks, a $250–$300 surge in gold prices was primarily driven by increased haven buying in response to concerns about the ongoing U.S. government shutdown. However, this was followed by profit-taking after an extended rally of nearly 25 percent over two months.
Looking ahead, gold prices are expected to remain unstable due to uncertainties surrounding global trade policies and the ongoing U.S. shutdown. Nevertheless, the essential long-term drivers for gold include high global debt levels, persistent central bank demand, and continued geopolitical and inflationary pressures.
Published on October 27, 2025.
