Gold slips below Rs 1.09 lakh/10 g on profit booking, US-India trade deal hopes

According to commodity market experts, the correction in gold prices came after a recent rally that had lifted the precious metal to historic peaks. The profit-taking came against the backdrop of bearish sentiment in the overseas markets which weighed on the metal.

New Delhi: Gold prices retreated from record levels to trade below the Rs 1.09 lakh-mark per 10 grams in the domestic futures market on Wednesday, as investors booked profits at elevated levels in tandem with a weak trend in overseas markets amid renewed optimism over a potential India-US trade pact.

Market participants said softer-than-expected US jobs data has raised concerns over the strength of the world's largest economy. Traders remained cautious ahead of key inflation readings later this week, which are expected to provide further cues on the US Federal Reserve's interest rate trajectory.

On the MCX, gold futures for October delivery declined Rs 203, or 0.19 per cent, to Rs 1,08,830 per 10 grams in a business turnover of 17,442 lots on Wednesday. The most-traded precious metal contract had surged to an all-time high of Rs 1,09,840 per 10 grams on Tuesday.

Similarly, the far-month gold futures for December delivery eased Rs 249, or 0.23 per cent, to Rs 1,09,839 per 10 grams in 5,069 lots. On Tuesday, the yellow metal had breached the Rs 1.10 lakh per 10 grams level for the first time ever before paring gains.

Meanwhile, US President Donald Trump said on Tuesday that the US and India are making progress in trade talks, striking an optimistic note as he prepares to speak with Prime Minister Narendra Modi in the coming weeks.

Responding to Trump's remarks, PM Modi in a post on X said India and the United States are "close friends and natural partners" and expressed confidence that the trade negotiations would help unlock the "limitless potential" of the India-US partnership.

Globally, Comex gold futures went down to USD 3,679.02 per ounce. It had surged to hit a lifetime high of USD 3,715.20 per ounce on Tuesday.

"Gold prices have soared nearly 40 per cent so far this year, breaching the USD 3,700 per ounce mark, after registering a 27 per cent surge in 2024," said Renisha Chainani, Head - Research at Augmont.

Chainani attributed the sustained rally to dovish monetary policies by major central banks, weakness in the US dollar, robust purchases by central banks across the globe and heightened geopolitical and economic concerns that have boosted the metal's safe-haven appeal.

"Investors will now turn to US producer price inflation data, which is scheduled to released later in the day, and consumer price inflation data on Thursday, which will likely offer stronger indications of the US central bank's monetary policy path and sentiment for the gold prices in the near-term," she said.