Gold Prices Drop in Kerala: Sovereign Price Falls by Over 1,000 Rupees
Gold prices in Kerala have witnessed a notable decline today, continuing the downward trend observed earlier. After a slight increase late yesterday, prices dipped again this morning. This market movement is attributed to the rise in the US dollar and higher crude oil prices, fueled by uncertainties surrounding the US-Iran peace agreement.
In the commodities market, June MCX gold futures recorded a 0.32% decline, trading at 151,280 per 10 grams. Meanwhile, May MCX silver futures were trading at 240,610 per kilogram as of 9:30 AM. International gold prices also remained under pressure as surging crude oil costs exacerbated inflation risks and fueled speculation that interest rates might remain elevated for an extended period.
In the local Kerala market, the price of gold per gram has dropped by 130 rupees today. Following the previous day’s closing rate of 14,150 rupees, the price for a gram of gold is now 14,020 rupees. A sovereign of gold is currently trading at 112,160 rupees, marking a significant decrease of 1,040 rupees from yesterday’s closing price of 113,200 rupees.
To put this in perspective, gold prices reached a monthly peak of 114,240 rupees per sovereign during Akshaya Tritiya. Since then, the market has seen a downward correction, with the lowest point this month recorded on April 2 at 109,240 rupees per sovereign.
The current global economic climate continues to impact local bullion prices. The US dollar gained nearly 1% this week, exerting pressure on gold. Additionally, the 10-year US Treasury yield increased by over 2%, raising the opportunity cost of holding gold, which is a non-yielding asset. While Brent crude oil prices have climbed more than 17% this week, exceeding $105 per barrel due to ongoing tensions despite ceasefire extensions, these fluctuations in oil and currency values have been the primary drivers of gold price trends over the last three months.
Jatin Trivedi, Vice President of Research (Commodity and Currency) at LKP Securities, noted, “The major pressure on gold prices is the rise in crude oil, which further fuels inflation and strengthens expectations of long-term high interest rates. This reduces the attractiveness of non-profitable assets like gold.” He added that while uncertainty around US-Iran talks is increasing volatility, the market is currently witnessing profit-booking rather than fresh buying.