Gold prices plunge by over $100 as US, China slash tariff rates; touch Rs 95,930 per 10 gm in India

While Monday’s loss is one of the biggest in recent times, traders attribute the correction to various factors including the progress in trade negotiations between US and China

On a day when the Indian equity benchmark indices recorded one of the strongest gains, gold shed nearly 3.5 percent with the price falling by more than $100 per ounce to touch $3,233 levels on Comex, which serves as the global benchmark price for gold.

In the Indian markets, the price fell by around Rs 3,740 per 10 grams to touch Rs 95,930. Incidentally, gold prices had crossed Rs 1 lakh mark last month amidst global uncertainties and tariff wars.

While Monday's loss is one of the biggest in recent times, traders attribute the correction to various factors including the progress in trade negotiations between US and China. In the Indian context, the easing of Indo-Pakistan tensions also acted as a catalyst, they said.

Data further shows that gold prices remained largely range-bound in the recent past with most days seeing prices fluctuate by just around 1-2 percent. For instance, the previous three days saw gold prices dip by less than 1 percent on each of the days.

"With US and China agreeing to a major reduction in tariff rates, gold prices have cooled after the recent rally. In the international markets, we saw the prices fall by over $100 per gram," said Kumar Jain, National Spokesperson, India Bullion and Jewelers Association (IBJA).

Demand, however, has not taken a hit due to the marriage season and the price correction will only push up the demand further, added Jain.

Interestingly, the yellow metal has gained significant ground in the last six months even as the benchmark indices Sensex and Nifty rose less than 5 percent during the period.

Data shows that gold prices have gained nearly 29% or more than $745 per gram in the last six months. In the last one month, however, Sensex has been an outperformer with gains of over seven percent. Gold meanwhile grew around 3.7 percent.

On Monday, the Sensex posted record gains of 2975.43 points or 3.74 percent to close at 82,429.90 while the Nifty settled the day at 24,924.70, up 916.70 points or 3.82 percent.