Indian consumers have paused the purchase of heavy bridal gold jewellery for weddings in December, expecting the price of the yellow metal to fall further. Since Donald Trump won the US presidential election, gold price has fallen by ₹4,622 per 10 gm, or 6.25%, in the physical market as the dollar has strengthened.
The price, which was ₹78,566 per 10 gm on November 5 when Trump's victory was confirmed, has fallen to ₹73,944 on Thursday. Still, gold is trading 17% higher from a year earlier.
Consumers are waiting for another round of correction before they start purchases, jewellers said.
Jewellers are also not restocking as they could face losses if the price declines after they buy the bullion.
"Wedding purchases will start by the end of November through December. Many NRIs also visit India during this time and purchase gold. Now people are buying small jewellery items. There is a feeling in the market that prices will further fall from this level," said Rajiv Popley, director of Mumbai-based Popley & Sons.
"There will be another correction of around $60 (per troy ounce) shortly," said Rajesh Rokde, vice-chairman of the All India Gem & Jewellery Domestic Council. "Prices will become attractive to the buyers in December and jewellers are likely to witness footfalls increasing. However, we feel a drop in prices is temporary and international prices will cross $3,000 per troy ounce in January-February when Trump announces his economic and trade policies."
Historically, a rising dollar has pressured gold prices. While the election of Trump positively impacted the Dollar Index, which measures the US dollar's value against a basket of major foreign currencies, it weighed on the gold price. The Dollar Index has surged to its highest level since June 2024, with it crossing the 106-mark Wednesday.
Pranav Mer, vice-president of Equity Business Group-Commodity & Currency Research at JM Financial Services, said a stronger dollar and elevated treasury yield after US data showed inflation remained above the Federal Reserve's 2% target, put pressure on gold.
The price, which was ₹78,566 per 10 gm on November 5 when Trump's victory was confirmed, has fallen to ₹73,944 on Thursday. Still, gold is trading 17% higher from a year earlier.
Consumers are waiting for another round of correction before they start purchases, jewellers said.
Jewellers are also not restocking as they could face losses if the price declines after they buy the bullion.
"Wedding purchases will start by the end of November through December. Many NRIs also visit India during this time and purchase gold. Now people are buying small jewellery items. There is a feeling in the market that prices will further fall from this level," said Rajiv Popley, director of Mumbai-based Popley & Sons.
"There will be another correction of around $60 (per troy ounce) shortly," said Rajesh Rokde, vice-chairman of the All India Gem & Jewellery Domestic Council. "Prices will become attractive to the buyers in December and jewellers are likely to witness footfalls increasing. However, we feel a drop in prices is temporary and international prices will cross $3,000 per troy ounce in January-February when Trump announces his economic and trade policies."
Historically, a rising dollar has pressured gold prices. While the election of Trump positively impacted the Dollar Index, which measures the US dollar's value against a basket of major foreign currencies, it weighed on the gold price. The Dollar Index has surged to its highest level since June 2024, with it crossing the 106-mark Wednesday.
Pranav Mer, vice-president of Equity Business Group-Commodity & Currency Research at JM Financial Services, said a stronger dollar and elevated treasury yield after US data showed inflation remained above the Federal Reserve's 2% target, put pressure on gold.
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