Gold prices declined by Rs 105 to Rs 59,975 per 10 grams in the national capital on Monday amid a fall in prices of precious metal internationally, according to HDFC Securities.
The yellow metal settled at Rs 60,080 per 10 grams in the previous trade.
Silver, however, zoomed Rs 730 to Rs 75,700 per kg.
The drop in gold prices in Delhi follows a decline in international prices of the precious metal, as investors shifted their focus to riskier assets. The price of gold fell to $1,785.91 per ounce on Monday, down from its recent peak of $1,797.67 on April 22.
Analysts attributed the decline in gold prices to several factors, including rising bond yields, a stronger US dollar, and a decline in inflation expectations.
Higher bond yields increase the opportunity cost of holding non-yielding assets like gold, while a stronger dollar makes gold more expensive for buyers holding other currencies. Inflation expectations have also declined in recent weeks, reducing the appeal of gold as an inflation hedge.
Meanwhile, silver prices have risen sharply in Delhi, with the price of the precious metal jumping by Rs 730 to Rs 75,700 per kg. Analysts say that the increase in silver prices is due to strong demand from industrial users, who use the metal in a wide range of applications, from electronics to solar panels.
The price of silver has been rising steadily in recent months, buoyed by strong demand from both industrial and investment buyers. In addition, silver is often seen as a more affordable alternative to gold, making it a popular choice for buyers looking for a store of value.
Despite the recent decline in gold prices, many analysts remain bullish on the long-term outlook for the precious metal. They point to a range of factors, including ongoing economic uncertainty, geopolitical tensions, and the potential for inflation to pick up in the coming months.
Moreover, gold is often seen as a safe haven asset, providing a hedge against economic and financial turmoil. As such, many investors view gold as a key component of a well-diversified portfolio.