Gold prices experienced a notable decline, dropping to approximately $4,100 per ounce on Wednesday. This downward trend marks a significant retreat from previous record highs, with the metal suffering its most considerable plunge since 2021, falling more than 5% in the latest session.
The decline in gold prices can be attributed to several factors. Traders have begun to lock in profits following the recent record-breaking rallies, leading to increased selling pressure. Additionally, a rising appetite for risk among investors has been spurred by optimism surrounding potential easing of US–China trade tensions. This shift in sentiment has diminished gold’s appeal as a safe-haven asset, traditionally sought after in times of uncertainty.
In India, a key market for gold, purchasing activity has cooled as the seasonal buying surge has come to an end, further contributing to the pressure on the physical gold market. Despite the current downturn, gold prices are still up nearly 60% year-to-date, bolstered by expectations of further interest rate cuts from the Federal Reserve in its upcoming meetings this year and wider market uncertainties that continue to influence investor behavior.
Looking ahead, market participants are closely monitoring the Consumer Price Index (CPI) report set to be released on Friday. This data is expected to provide critical insights into future monetary policy decisions, which could further impact gold prices and investment strategies in the coming weeks.
