Gold prices declined on November 22 as stronger-than-expected US labor data adversely impacted global bullion markets. The report, which showed an increase in nonfarm payrolls, heightened expectations of interest rate stability from the Federal Reserve, consequently reducing the likelihood of a rate cut in the near future. This economic backdrop exerted downward pressure on gold prices internationally, leading to varied reactions among local traders.
The latest data revealed a notable shift in the gold market. Spot gold fell as international selling intensified, reflecting the immediate impact of the US jobs report. The rise in employment numbers diminished expectations for a December rate cut, resulting in a decreased appetite for precious metals. Alongside gold, silver also experienced a decline in value.
Despite the global pressure, domestic futures exhibited mixed results. The most-traded December contract on the Multi Commodity Exchange (MCX) experienced a modest increase, rising by approximately Rs. 1,168 to close at Rs. 1,23,895 per 10 grams. The February contract also showed gains. Analysts noted that the depreciation of the Indian rupee helped to limit overall losses, as a weaker currency can provide some local support for gold prices.
Renisha Chainani, Head of Research at Augmont, identified the US payroll report as a key factor driving the market fluctuations. Similarly, Jateen Trivedi of LKP Securities pointed out that the volatility observed in the market is largely influenced by currency movements and local demand. He anticipates that gold prices will continue to experience significant fluctuations within a range of Rs. 1,20,000 to Rs. 1,24,000 per 10 grams in the near term.
City-Level Price Variations in Gold
As of November 22, city markets in India displayed distinct pricing trends for gold. In Delhi, prices for 24K gold reached Rs. 1,26,100 per 10 grams, while 22K gold was valued at Rs. 1,15,500. Meanwhile, Mumbai reported prices of Rs. 1,24,250 for 24K gold and Rs. 1,13,890 for 22K gold. In Bengaluru, 24K gold was priced slightly higher at Rs. 1,25,840, with 22K gold at Rs. 1,15,350.
These city-specific rates reflect local demand and supply conditions, alongside broader national trends. Market analysts indicate that short-term volatility is likely to persist, with global macroeconomic data remaining a primary driver of gold prices. Currency fluctuations and variations in local demand can rapidly influence domestic rates, underscoring the complex dynamics of the gold market.
Moving forward, the performance of gold will depend on forthcoming economic indicators and currency movements. While 24K gold remains the benchmark for bullion, 22K gold continues to be the preferred choice for jewelry in many urban centers across India. As traders navigate these market fluctuations, the interplay of global and local factors will play a critical role in shaping future price trends.
