KKN Gurugram Desk | On Friday, March 7, 2025, gold prices have seen a noticeable drop, marking a shift in the market as we approach the week before Holi. Gold has become more affordable, with prices falling by up to ₹500. In major cities across India, the price of 24-carat gold is hovering around ₹87,400 per 10 grams, while 22-carat gold is trading above ₹80,150. The price of silver, on the other hand, has reached ₹99,100 per kilogram. Let’s explore the reasons behind this drop in gold prices and take a look at the latest prices across India’s major cities.

Why Did Gold Prices Drop?

Experts suggest that the decline in gold prices is largely attributed to cautious investor sentiment, coupled with potential shifts in global economic policies. In particular, market instability is being fueled by speculations surrounding revisions in U.S. tariffs and the impact of key economic indicators such as employment rates and unemployment figures. As these factors create uncertainty, investor behavior has shifted, leading to a reduction in demand for gold as a safe-haven investment.

The global market’s reaction to economic fluctuations often impacts the prices of precious metals like gold. When investors perceive risk in other areas of the economy, they tend to pull back from gold, resulting in price declines. Moreover, fluctuations in the global economy, especially in the U.S., continue to influence sentiment in the Indian market as well.

Gold Prices in Major Indian Cities: March 7, 2025

In India’s major cities, the price of gold has been affected by both domestic and international factors. Let’s take a look at how gold prices are faring in some of the country’s largest urban centers.

Delhi:

• 22-carat gold: ₹80,340 per 10 grams
• 24-carat gold: ₹87,630 per 10 grams

Mumbai:

• 22-carat gold: ₹80,190 per 10 grams
• 24-carat gold: ₹87,480 per 10 grams

Chennai:

• 22-carat gold: ₹80,190 per 10 grams
• 24-carat gold: ₹87,480 per 10 grams

Kolkata:

• 22-carat gold: ₹80,190 per 10 grams
• 24-carat gold: ₹87,480 per 10 grams

As seen above, the prices of 24-carat and 22-carat gold are largely consistent across these cities. However, small fluctuations may exist due to regional taxes and transportation costs, which can affect the overall price.

Silver Prices on March 7, 2025

Silver has also experienced a price surge, which contrasts with the decline in gold. The price of silver has risen by approximately ₹1,200 per kilogram, with the current rate standing at ₹99,100. This rise in silver prices may be attributed to increased demand or other market dynamics affecting precious metals as a whole.

Factors Affecting Gold Prices in India

Gold prices in India are influenced by a variety of factors, both domestic and international. Here are the key elements that contribute to fluctuations in gold prices:

1. Global Economic Conditions

The price of gold is heavily influenced by global economic conditions. For instance, economic instability in major economies like the U.S. or Europe often drives investors to seek safe-haven assets like gold. Conversely, if the global economy shows signs of stability, demand for gold as a hedge against risk tends to decrease, leading to lower prices.

2. Movement in the Dollar and Rupee Exchange Rate

The value of the Indian rupee against the U.S. dollar is another crucial factor in determining gold prices in India. Since gold is traded in dollars on the international market, any changes in the exchange rate can cause fluctuations in domestic gold prices. If the rupee weakens against the dollar, gold becomes more expensive in India, even if global gold prices remain stable.

3. Inflation Rates

Gold is often seen as a hedge against inflation. When inflation is high, the value of fiat currency erodes, and people tend to invest in gold to preserve their wealth. This increased demand for gold can drive prices higher.

4. Government Policies and Taxes

The Indian government plays a significant role in determining gold prices through taxes and import duties. Any changes in government policies, such as an increase in import duties on gold, can make the metal more expensive. Similarly, tax policies affecting gold purchases or investments also contribute to price variations.

5. Demand for Gold in Festivals and Weddings

Gold holds significant cultural importance in India. It is a key part of various festivals, especially Diwali, and weddings. As demand for gold increases during these periods, prices tend to rise. The approaching festival of Holi may see a slight uptick in demand, although it hasn’t had a noticeable impact on prices yet this year.

6. Market Speculation and Investor Sentiment

Speculative trading in the gold market can lead to price volatility. Investors react to news, geopolitical events, and global market trends, which can cause sudden price movements. For example, any signs of a global recession or political unrest can trigger gold price hikes, while stable economic conditions can lead to price declines.

7. Geopolitical Events

Global geopolitical events such as wars, conflicts, and international tensions can also push gold prices higher. Gold is traditionally viewed as a safe-haven investment during times of political or economic uncertainty. Conversely, peace agreements or reduced tensions may cause investors to pull away from gold, leading to a drop in prices.

What to Expect in the Coming Days?

As Holi approaches, there could be a slight increase in demand for gold, especially in the form of jewelry and gifts. However, market analysts suggest that this demand may not be strong enough to counterbalance the broader economic factors at play. Investors and consumers are advised to stay informed about any global or domestic developments that could impact gold prices in the near future.

In the short term, we may see further fluctuations in gold prices as global economic conditions continue to evolve. As for the price of silver, the ongoing price rise may continue if demand remains high, or if there are external factors influencing its value.

Gold prices have seen a decline on March 7, 2025, largely due to investor caution and global economic uncertainties. The price of gold has dropped by ₹500, with 24-carat gold trading around ₹87,400 and 22-carat gold above ₹80,150 in major Indian cities. Meanwhile, silver has risen to ₹99,100 per kilogram, marking a significant increase.

The key factors influencing gold prices include global economic conditions, the U.S. dollar-rupee exchange rate, inflation rates, and government policies. While gold continues to be an essential investment for many, its price is subject to fluctuations driven by these factors.