After scaling record high, gold prices fall sharply in Kerala; down by ₹1,360 per sovereign in 2 days

Two days after touching a record high, gold prices in Kerala edged lower on Friday, with the rate falling by ₹360 to ₹73,680 per sovereign. The dip comes after a drop of ₹1,000 on Thursday, bringing the total two-day decline to ₹1,360 per sovereign (8 gm).

The price decline follows Wednesday's historic surge, when prices crossed ₹75,000 per sovereign in the state for the first time. The price of a gram of gold also dipped by ₹45 to ₹9,210, according to All Kerala Gold and Silver Merchants Association (AKGSMA), which sets the daily rates in the state based on trends in global markets.

Gold prices in the international market fell to $3,356.75 per ounce on Friday, helped by easing trade tensions between the US and its partners as President Donald Trump showed a willingness to engage in talks. 

The shift in sentiment prompted investors to move towards riskier assets, reducing demand for gold, which is traditionally viewed as a safe-haven investment during times of political and economic uncertainty. However, a weakening US dollar helped limit the extent of gold's decline. 

Moreover, expectations that the US Federal Reserve will hold its policy rates steady also contributed to the decline in gold prices. As interest rates and gold typically share an inverse relationship, the anticipation of stable rates reduced investor demand for the yellow metal— a trend reflected in domestic markets as well.

In Kerala, the price of 18-karat gold dropped by ₹35 to ₹7,590 per gram, according to AKGSMA. Silver is currently priced at ₹127 per gram.

However, for consumers, buying gold becomes even more expensive due to additional costs, including a 3 per cent GST, a hallmarking fee of ₹53, and making charges, which vary depending on the type of jewellery and the jeweller.