Hyderabad — In a troubling trend for gold investors, gold rates in Hyderabad and various other cities are likely to experience additional declines in the near future, according to industry experts. Since November 7, prices for 22-carat gold have dropped by Rs 4,200, while 24-carat gold has seen a decline of Rs 4,590. Market analysts suggest that the current landscape is dominated by sellers, with few immediate positive indicators to suggest a turnaround. Jateen Trivedi, VP Research Analyst at LKP Securities, remarked, “The correction in gold prices is not over, and the next lower target zone is becoming increasingly likely.” The factors influencing the yellow metal's prices are multifaceted.
Despite the US Federal Reserve’s ongoing rate cuts as inflation trends toward its 2 percent goal, recent consumer price index (CPI) figures have raised alarms. The CPI registered a surprising increase of 2.6 percent, surpassing the expected 2.4 percent, which has contributed to a negative reaction in gold prices. “This development added pressure on gold prices, which reacted negatively to the stronger dollar and the potential shift in Fed policy,” Trivedi added. The economic landscape has also been affected by geopolitical tensions, as Sandip Raichura, CEO of PL Broking and Distribution, pointed out.
He noted that a trade deal leading to a tariff war appears imminent, resulting in a significant strengthening of the US dollar. This situation has further compounded the downward pressure on gold prices. Pranav Mer, Vice President of EBG-Commodity and Currency Research at JM Financial Services, echoed these sentiments, emphasizing that a robust dollar and elevated treasury yields continue to weigh heavily on gold prices. With inflation remaining stubbornly above the Fed's 2 percent target, the outlook for gold does not appear promising. As market dynamics remain uncertain, stakeholders in the gold sector should brace for further corrections in gold prices both in Hyderabad and other cities across the nation. Investors are advised to keep a close watch on these developments as they unfold.
