Gold price crash: Sovereign rate falls Rs 2,480; October decline reaches Rs 7,600

Gold prices witnessed a sharp decline in domestic and international markets on Friday, with the precious metal falling to a one-year low amid rising inflation concerns and expectations of tighter monetary policy in the US. A sharp sell-off in technology stocks also added to the pressure on precious metals, triggering concerns over further losses in the market.

In Kerala, the price of gold fell by Rs 2,480 per sovereign on Saturday to Rs 1,01,840. The price per gram declined by Rs 310 to Rs 12,730. With the latest fall, gold has lost Rs 7,600 per sovereign in Kerala since the beginning of October, when the price stood at Rs 1,09,440.

In the international market, spot gold fell 3.5% to $3,880.97 per troy ounce by 2:13 p.m. ET on Friday, marking its lowest level since October 2025. US gold futures for December delivery settled 3.3% lower at $3,898.90 per ounce.

Silver prices also came under heavy selling pressure, falling 6.5% to $49 an ounce and slipping below the $50 mark for the first time in 11 months. In Kerala, silver prices declined by Rs 10 per gram to Rs 200.

The weakness in US technology stocks added to the pressure on precious metals. Concerns over whether heavy investments in artificial intelligence would generate adequate returns triggered a sell-off in technology shares. Analysts at Commerzbank said the stock market decline may have prompted forced selling of safe-haven assets such as gold, along with margin calls.

Inflation concerns weigh on gold

Rising crude oil prices and persistent inflationary pressures in the US have strengthened expectations of further monetary tightening by the Federal Reserve. The US central bank kept its benchmark interest rate unchanged at 3.75%-4% at its October 28 policy meeting, following a rate increase in September. However, two policymakers favoured another quarter-percentage-point increase, highlighting concerns over persistent inflation.

Market expectations of another rate hike in December have also strengthened amid concerns that higher energy prices could fuel inflation further. Higher interest rates generally reduce the appeal of gold, which does not generate interest income, while making interest-bearing assets more attractive.

The prospect of tighter monetary policy, coupled with rising bond yields and persistent inflation concerns, has added to the pressure on precious metals.