Gold sheds safe haven appeal amid Israel-Iran conflict; Kerala rates dip again

Gold prices in Kerala fell for the second consecutive day on Tuesday, offering some relief to customers and jewellers amid concerns of a surge driven by the ongoing Iran-Israel conflict. The price of one sovereign dropped by ₹840 to ₹73,600, while the rate of a gram declined by ₹105 to ₹9,200.

The decline follows a ₹120 drop in gold rates on Monday, when a sovereign was priced at ₹74,440. Prices have been falling since reaching an all-time high of ₹74,560 per sovereign in the state on June 14. 

Heightened tensions in the Middle East, along with other global concerns, pushed gold to a record high last week, as it is traditionally viewed as a safe-haven investment during times of uncertainty.

However, despite the escalating Israel-Iran conflict and missile attacks near capital cities, gold prices have continued to decline globally, with investors selling off holdings to capitalise on recent highs.

Gold prices dipped over 1 per cent in early trade on Tuesday but later recovered slightly, rising 0.2 per cent to $3,388.57 an ounce, according to Reuters. However, the US gold futures fell 0.3 per cent to $3,407.20 as of 11:50 am IST. 

Domestic markets also take cues from international trends, with prices adjusted daily around 10 am by the All Kerala Gold and Silver Merchants Association based on the latest global rates. The price of a gram of 18 karat gold dropped to ₹7,575 on Tuesday from ₹7,660 the previous day. Silver rate did not change today and is staying at ₹118 per gram.

Meanwhile, uncertainty lingers around the US central bank's decision on whether to opt for a rate cut or maintain a pause amid ongoing geopolitical tensions. If the Federal Reserve decides to cut rates, it could further support gold prices, as lower yields would make US bonds less attractive, thereby boosting demand for the precious metal.