Gold Prices In Big Cities Drop Sharply After RBI's Rates Decision; Why 24K, 22K, 18K Prices Are Down On Dec-6?

Gold prices in India dropped sharply on Friday, December 6, 2024, after RBI kept the repo rate unchanged for over two years now to 6.50%. Benchmark interest rates have a direct impact on gold. When the repo rate goes up, alternative assets like stocks, bonds and currencies become attractive, but during the time of lower interest rates, non-yielding assets like gold become a haven. A rate cut is impending from RBI, however, the central bank has preferred to be in a wait-and-watch mode. Accordingly, gold prices in major cities dropped steeply on Friday.

Gold Prices In India:

24K gold price of 100 grams fell by Rs 2,700 to Rs 7,76,200 on December 6, while 10 grams gold is down by Rs 270 to Rs 77,620 per 10 grams. Also, gold prices of 10 grams dipped by Rs 250 and Rs 200 in 22K and 18K to Rs 71,150 and Rs 58,220 respectively.

Gold Prices In Major Cities:

Gold Prices In Chennai: Gold prices here fell by Rs 20 to Rs 2,700 across grams in 24K, 22K, and 18K. 10 grams of gold is at Rs 77,620 in 24K currently.

Gold Prices In Mumbai: Witnessing a similar decline across carats, gold prices in 24K of 10 grams were the same as in Chennai to Rs 77,620. However, the only difference was the Rs 58,220 gold price for 10 grams of 18K in Mumbai, which was cheaper than the Chennai price of Rs 58,750 per 10 grams of 18K.

These rates were similar in gold prices of Hyderabad, Kerala, Bangalore, Kolkata and Pune.

Gold Prices In Delhi: Although, gold prices fell by Rs 20 to Rs 2,700 in Delhi as well, however, the yellow metal was much more expensive in the national capital than compared to the above two metro cities. Gold prices in 10 grams of 22K, 24K and 18K are at Rs 71,130, Rs 77,770 and Rs 58,340.

Silver Prices In India:

Unlike gold, silver prices across grams were unchanged on December 6. 1 kg of silver is at Rs 92,000, while 100 grams and 10 grams of silver are at Rs 9,200 and Rs 920 respectively.

In cities like Chennai, Hyderabad and Kerala, 1 kg silver price stood at Rs 1,01,100.

MCX Gold, Silver Prices:

At MCX, gold prices surged by Rs 198 or 0.26% to trade at Rs 76,674 per 10 grams. The bullion with a February 2025 expiry ranged between Rs 76,825 to Rs 76,552 per 10 grams.

Additionally, MCX silver prices traded in the range of Rs 93,275 to Rs 92,690 per 1kg. Silver with March 2025 expiry is currently at Rs 92,932 per 1kg up by Rs 508 or 0.6%.

Rahul Kalantri, VP of Commodities, Mehta Equities said gold and silver prices paused their rally ahead of key U.S. job data, as doubts over December rate cuts emerged after Fed Chair Jerome Powell's recent comments. He highlighted the resilience of the U.S. economy and reduced risks to the labour market, leading traders to trim long positions. The World Gold Council's November report revealed a 28.6-tonne outflow from global gold ETFs, valued at $2.1 billion, further pressuring precious metal prices. However, a softer dollar could provide some support to gold and silver prices at lower levels. Gold has support at $2615-2600 while resistance at $2642-2657. Silver has support at 30.98-30.75 while resistance is at $31.40-31.62. In INR gold has support at Rs76,210-76,000, while resistance at Rs76,670-76,840. Silver has support at Rs92,000-91,480, while resistance is at Rs 92,950-93,540.

As per Nirmal Bang, gold fell toward $2,620 on Friday, falling for the second consecutive session and reaching its lowest level in over a week, as markets awaited fresh US data for insights into Federal Reserve monetary policy.

Furthermore, Nirmal Bang's report stated that data showed that the number of Americans filing new applications for unemployment benefits rose last week, indicating a gradual cooling of the labour market. This comes ahead of the pivotal US nonfarm payrolls report, scheduled for release later Friday, which is the next major data point before Fed policymakers meet in mid-December. The odds of a 25 bps rate cut in December stand at 70%, which benefits gold by reducing the opportunity cost of holding non-interest-bearing assets. Meanwhile, the World Gold Council reported that China's demand for gold jewellery dropped, but investment stayed strong in 2024. It also forecasts that both sectors may stabilize, with gold jewellery demand possibly improving, while investment growth could slow in 2025.