KKN Gurugram Desk | On Friday, February 28, 2025, the prices of gold have witnessed a decline in India. This marks the second consecutive day of falling gold prices. As February comes to an end, the price of 24-carat gold has decreased by up to ₹500 per 10 grams, while 22-carat gold has seen a reduction of ₹400 per 10 grams. This price correction reflects broader market dynamics, and those looking to buy gold today will find it priced lower than it has been in recent days.

Across the major cities in India, the price of 24-carat gold is trading around ₹87,300 per 10 grams, while 22-carat gold is approximately ₹80,100 per 10 grams. The price of silver has also experienced a decline, with 1 kilogram of silver priced around ₹98,000.

Why Gold Prices Are Falling?

The drop in gold prices can be attributed to multiple factors. Gold prices are often influenced by the strength of the dollar and changes in global financial policies. The U.S. Federal Reserve’s decisions regarding interest rates can also have a direct impact on gold prices. As the dollar strengthens or the Fed raises interest rates, gold prices tend to decline.

Additionally, demand for gold can fluctuate depending on the season. For instance, during the festive seasons or wedding periods, the demand for gold rises, pushing prices up. However, in the absence of such demand, prices can drop. Investors seeking to capitalize on price increases may also sell off gold, leading to lower rates.

It’s important for investors and gold buyers to keep an eye on market trends, economic shifts, and government policies, as all of these can influence gold prices significantly.

Gold Prices in Major Cities of India

In Delhi, the price of 24-carat gold has seen a slight increase and is currently priced at ₹87,520 per 10 grams. Meanwhile, 22-carat gold in the city is being traded at ₹80,240 per 10 grams.

In Mumbai, 24-carat gold is priced at ₹87,370 per 10 grams, while 22-carat gold is available for ₹80,090 per 10 grams. In Kolkata, the prices are similar, with 24-carat gold at ₹87,370 and 22-carat gold at ₹80,090.

In Chennai, 22-carat gold is being sold at ₹80,090, and the price of 24-carat gold stands at ₹87,370 per 10 grams. These prices reflect regional fluctuations, and buyers in these cities are seeing slight variances in pricing.

Silver Price Update

On February 28, 2025, the price of silver in India is ₹97,900 per kilogram. Silver prices often see less fluctuation compared to gold, but they are still impacted by similar global factors, such as demand, industrial usage, and economic conditions.

Factors That Influence Gold Prices in India

Gold prices in India are determined by a variety of factors, including international market trends, government policies, taxes, and fluctuations in the value of the rupee. India is one of the largest consumers of gold globally, and the price of gold is closely tied to global trends in demand, supply, and investor sentiment.

International gold prices are influenced by factors such as geopolitical events, inflation, and the performance of global financial markets. Additionally, the Indian government imposes taxes on gold imports, which directly affects domestic prices. Any change in these policies can lead to fluctuations in gold prices.

One of the biggest drivers of gold prices in India is the festive season. Festivals like Diwali and Dussehra, along with the wedding season, drive a surge in gold demand. These cultural events lead to a rise in gold buying, which in turn pushes up the prices. Thus, the demand cycle for gold is closely linked to cultural factors in India.

The Role of the US Dollar and Global Economic Trends

Gold is often seen as a safe-haven investment during times of global economic uncertainty. As the US dollar strengthens, the price of gold tends to fall, because gold becomes more expensive for holders of other currencies. Similarly, when the dollar weakens, the price of gold tends to rise as it becomes more affordable for international buyers.

Furthermore, decisions made by central banks, especially the U.S. Federal Reserve, can significantly impact gold prices. If the Fed raises interest rates, it can lead to lower gold prices as higher interest rates make other investments, like bonds and savings accounts, more attractive. Conversely, if the Fed cuts rates, gold may become more appealing, leading to an increase in prices.

Gold as an Investment

Gold is traditionally viewed as a safe investment, especially in times of economic volatility. Many investors turn to gold as a store of value to hedge against inflation or currency fluctuations. Unlike other assets, gold does not generate income like dividends or interest. However, its value tends to appreciate over time, making it an attractive long-term investment.

Gold is also considered a stable asset during times of political or economic instability. Whether it’s a financial crisis, a natural disaster, or geopolitical tensions, investors often flock to gold as a hedge against uncertainty.

How to Invest in Gold in India?

Investing in gold in India can be done in several ways. Here are some common methods:

1. Physical Gold: This includes buying gold coins, bars, or jewelry. This method is popular in India due to the cultural significance of gold, particularly during weddings and festivals.

2. Gold ETFs (Exchange-Traded Funds): Gold ETFs allow investors to buy shares that are backed by physical gold. They are traded on the stock exchange, making them a more liquid and convenient way to invest in gold.

3. Sovereign Gold Bonds: Issued by the Indian government, these bonds offer a fixed interest rate on gold holdings and are an attractive option for long-term investors. They are less prone to theft and offer better safety than physical gold.

4. Gold Mutual Funds: These funds invest in gold-related assets and securities. They are ideal for investors who prefer a more diversified approach to investing in gold.

Gold Demand in India

India’s demand for gold is driven by a combination of factors, including cultural significance, investment potential, and the jewelry market. India has a long history of gold consumption, and gold is often seen as a symbol of wealth and prosperity.

The wedding season, which spans several months each year, sees a surge in gold purchases, as it is customary to buy gold jewelry for brides. In addition to this, festivals such as Diwali and Akshaya Tritiya also drive significant gold demand.

Moreover, gold is often seen as a safe-haven investment during times of inflation or economic instability. Many investors choose gold to protect their wealth against rising prices or currency depreciation.

Gold prices are highly volatile and can change rapidly based on a wide range of global and domestic factors. In India, the price of gold is influenced by the international market, government policies, and seasonal demand. The price fluctuations seen today, as well as the impact of economic policies and market trends, highlight the dynamic nature of gold prices.

For anyone considering purchasing gold, whether as an investment or for personal use, it’s important to stay informed about market trends. Keeping an eye on the global economy, changes in interest rates, and the demand for gold during festive seasons can help buyers make informed decisions. With the current decline in gold prices, it could be a good opportunity for buyers to consider adding gold to their portfolios, but they should also be mindful of any future price fluctuations.

As always, when investing in gold, it’s important to do thorough research and consider factors such as storage, safety, and liquidity to ensure that your investment is secure.