Gold prices plunge in Kerala; sovereign falls by Rs 1,240 to lowest level since August

THIRUVANANTHAPURAM: Gold prices in Kerala witnessed a sharp decline on Thursday, with the price of a sovereign (8 grams) falling by Rs 1,240 to Rs 1,05,880. The price per gram dropped by Rs 155 to Rs 13,235, marking the lowest level since the first week of August.

Gold prices had risen to Rs 1,11,040 per sovereign on October 10. Silver prices also declined on Thursday, falling by Rs 5 per gram to Rs 225.

Rising crude oil prices, attributed to Houthi attacks targeting Saudi Arabia and ongoing explosions in Iran, are putting pressure on gold prices. International gold prices plunged from $4,141 to $4,090 an ounce, leading to a corresponding decline in Kerala.

The US Federal Reserve is scheduled to announce a key monetary policy decision next week. Although an interest rate hike this month is considered unlikely, a rate increase in December remains a possibility. This outlook points to the potential for gold prices to fall further towards the end of the year.

However, if tensions in West Asia ease and the Russia-Ukraine war comes to an end, crude oil prices could decline. In that scenario, international gold prices could recover to above $4,200 an ounce, potentially pushing gold prices in Kerala above Rs 1.10 lakh per sovereign again.