Kerala gold prices swing wildly, drop ₹9,800. But 2026 has more surprises

Gold prices in Kerala witnessed sharp volatility on Monday, dipping sharply during the morning and afternoon sessions before staging a partial recovery by evening. The price of a sovereign of gold currently stands at ₹1,09,920, while the rate per gram is ₹13,740.

According to the All Kerala Gold and Silver Merchants Association, which fixes the daily bullion rates in the state, gold prices fell steeply in the morning, with the rate dropping by ₹6,640 per sovereign to ₹1,11,120, tracking weakness in international markets.

Prices declined further in the afternoon session, with the sovereign rate falling by another ₹3,200 to ₹1,07,920, while the price per gram dropped by ₹400 to ₹13,490. However, the downward trend reversed in the evening, with prices rebounding by ₹2,000 per sovereign.

The volatility was attributed to a sharp fall in international gold prices following US President Donald Trump's selection of Kevin Marsh as the next chair of the Federal Reserve, replacing incumbent Jerome Powell. Spot gold was trading nearly 8 per cent lower at $4,775.96 per ounce as of 5.15 pm, according to Reuters. The bullion rates touched an all-time high of $5,594.82 per ounce on January 29.

At the time of the global peak, gold prices in Kerala had crossed ₹1.31 lakh per sovereign. 

The sudden drop in international markets in the last two days prompted buyers to capitalise on the dip, with demand picking up as prices fell. This has led to a partial recovery in prices by evening in the state. 

Market sentiment, however, remains bullish in the longer term. Several global banks have forecast further gains in gold prices by the end of 2026. US banking major JP Morgan expects gold to reach $6,300 per ounce by then, citing sustained demand from central banks and investors. Deutsche Bank on Monday reiterated its forecast of $6,000 per ounce in 2026, while other major lenders, including Goldman Sachs, UBS and Citi, have projected prices in the $5,000–$5,500 range.

Meanwhile, silver prices in Kerala also declined on Monday, with the rate per gram falling by ₹50 to ₹300.