Gold price in Kerala dips on strong rupee, ME ceasefire announcement

Gold prices in Kerala fell on Tuesday following US President Donald Trump's announcement of a ceasefire between Israel and Iran, signalling a potential end to the 12-day conflict. The development brought much-needed relief to global markets, including India, where both the benchmark indices and the rupee strengthened.

The price of a sovereign of gold decreased by ₹1,080 to ₹72,760, while the rate of a gram of the metal saw a decline of ₹135 to ₹9,095, according to the All Kerala Gold and Silver Merchants Association (AKGSMA). The price was revised twice during the day.

The appreciation of the rupee against the US dollar contributed to the decline in domestic gold prices, as a stronger currency makes imports, including gold, more affordable. Meanwhile, the Indian stock market also strengthened, with increased foreign and domestic inflows boosting benchmark indices Nifty and Sensex.

This signalled a pullback by investors from gold, traditionally seen as a safe haven asset during times of economic and political uncertainty. With tensions in the Middle East easing, investors are now shifting focus towards equities and other risk-based assets, aiming to capitalise on the renewed market optimism.

Spot gold was down at $3,338.39 an ounce in the global markets, after hitting its lowest level since June 11 earlier in the session, according to Reuters. Spot silver also eased 0.1 per cent to $36.08 per ounce.

Taking cues, the price of a gram of 18 karat gold in Kerala dropped to ₹7,540 while silver prices eased to ₹119 per gram.