Gold and Silver Prices Decline Amid Market Corrections and Stronger US Dollar

Gold prices saw their first weekly decline in nine weeks, dropping over 1% due to profit-taking and a stronger US dollar. Global gold fell over 2%, dipping below $2,900 per ounce, while 24K gold in India declined to ₹86,620 per 10 grams. Silver also dropped over 3%, reaching ₹97,000 per kg amid weak demand. Factors influencing the decline include a rebounding US dollar, Trump’s tariff announcements, and reduced domestic demand. Analysts suggest gold may struggle to regain momentum amid economic uncertainties and Federal Reserve policies.

Gold and Silver Prices Decline Amid Market Corrections and Stronger US Dollar

Gold prices recorded their first weekly decline in nine weeks, dropping over 1% due to profit-taking and a strengthening US dollar. Following an eight-week rally fueled by safe-haven demand, a weaker dollar, and strong domestic interest, gold prices corrected sharply this week.

Between December 7, 2024, and February 22, 2025, gold surged nearly 12%, gaining over ₹10,000 per 10 grams. However, in Delhi, 24-carat gold slipped to ₹86,620 per 10 grams on Saturday, down from ₹87,920 the previous week. Similarly, 22-carat gold dropped to ₹79,400 per 10 grams, reflecting a weekly decline of ₹1,050.

In global markets, gold declined over 2% this week, falling below $2,900 per ounce on Friday. The metal had hit a record high of $2,954 per ounce on Tuesday before reversing its gains. By Friday, it was trading at $2,863.46 per ounce.

Gold started the week strongly, reaching an all-time high of ₹88,090 per 10 grams (24K) on Tuesday, while 22K gold peaked at ₹80,750 per 10 grams in Mumbai and other major cities. However, profit-taking led to a ₹270 dip on Wednesday, followed by further drops of ₹440 on Thursday and ₹540 on Friday, bringing 24K gold to ₹86,840 per 10 grams.

Silver experienced an even sharper decline, plunging over 3% this week amid reduced demand. The price of silver stood at ₹97,000 per kg on Saturday, down ₹3,500 from ₹1,00,500 last week. After holding firm at ₹1,01,000 per kg on Tuesday, silver plummeted ₹3,000 on Wednesday and another ₹1,000 on Friday, influenced by weakening demand and renewed support for fossil fuels in the US.

Key Factors Behind the Decline

1. Strengthening US Dollar

The US dollar rebounded to 107 levels, pressuring gold prices. Economic data suggesting a resilient US economy and inflation risks linked to President Donald Trump’s policies dampened hopes of an interest rate cut by the Federal Reserve. The dollar index reached a multi-week high of 107.39 on Friday following Trump’s tariff threats against Europe and China, reducing gold’s appeal as a non-yielding asset.

2. Profit-Taking by Investors

After an extended eight-week rally, some investors took profits, leading to downward pressure on gold prices.

3. Tariff Announcements & Economic Uncertainty

Trump’s announcement of new tariffs on Mexican, Canadian, and Chinese imports (effective March 4) strengthened the US dollar, negatively impacting metal prices.

4. US Inflation Data Expectations

Investors are closely monitoring the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, due for release at 13:30 GMT.

5. Federal Reserve’s Interest Rate Stance

Philadelphia Fed President Patrick Harker indicated support for maintaining interest rates between 4.25%-4.50%, reducing expectations of rate cuts, which would have otherwise supported gold prices.

6. Seasonal Weakness in Domestic Demand

Domestic gold demand declined towards the end of the week. With fewer auspicious wedding dates in March, seasonal demand is expected to remain subdued.

Gold and Silver Prices in India (March 1, 2025)

• 24-carat gold: ₹8,700.3 per gram (↓ ₹540)
• 22-carat gold: ₹7,976.3 per gram (↓ ₹500)
• Silver: ₹1,00,000 per kg (↓ ₹1,000)

Gold Prices in Major North Indian Cities (Per 10 Grams)

• Delhi: ₹87,003 (↓ from ₹87,983 on Feb 28)
• Jaipur: ₹86,996 (↓ from ₹87,976 on Feb 28)
• Lucknow: ₹87,019 (↓ from ₹87,999 on Feb 28)
• Chandigarh: ₹87,012 (↓ from ₹87,992 on Feb 28)
• Amritsar: ₹87,030 (↓ from ₹88,010 on Feb 28)

Silver Rates in Major North Indian Cities (Per Kg)

• Delhi: ₹1,00,000 (↓ from ₹1,01,000 on Feb 28)
• Jaipur: ₹1,00,400 (↓ from ₹1,01,400 on Feb 28)
• Lucknow: ₹1,00,900 (↓ from ₹1,01,900 on Feb 28)
• Chandigarh: ₹99,400 (↓ from ₹1,00,400 on Feb 28)
• Patna: ₹1,00,100 (↓ from ₹1,01,100 on Feb 28)

Technical Levels for Gold

• Support: $2,855-$2,840 per ounce | ₹84,850-₹84,620 per 10 grams
• Resistance: $2,900-$2,922 per ounce | ₹85,480-₹85,640 per 10 grams

Outlook

According to Rahul Kalantri, VP Commodities at Mehta Equities, gold is struggling to sustain gains due to dollar strength and tariff concerns. Geopolitical developments, along with US inflation data and Federal Reserve policy decisions, will continue to drive gold and silver prices in the coming weeks.