Mumbai: The post-Diwali rush for gold may slow as the precious metal is expected to open on a weak note in the domestic market on Wednesday, following a sharp 5.5 per cent fall in international gold prices, the steepest decline since August 2020.

Analysts expect Indian gold rates to correct to around ₹1.22–₹1.23 lakh per 10 grams when markets open. The fall in global prices has prompted profit-booking among investors who benefited from gold’s recent rally.

Silver also declined, losing over 2 per cent and trading near $47.6 per ounce after tumbling 7.1 per cent in the previous session. Both metals extended their slide from record highs, while Asian stock markets showed mixed trends after a muted Wall Street session.

Experts attribute the sharp drop to a wave of profit-taking following gold and silver’s rapid rise this year. “Many investors have grown cautious, believing that gold's rally may have entered a bubble zone,” analysts said.

This year, gold prices surged nearly 60 per cent, driven by concerns over the fiscal health of major economies, particularly the US, expectations of further Federal Reserve rate cuts, central banks diversifying away from the dollar, and retail investment in exchange-traded funds.

Market sentiment also turned cautious amid signs of potential progress in US-China trade talks. US President Donald Trump said he expects a “good deal” in his upcoming meeting with Chinese President Xi Jinping, while acknowledging possible hurdles.

Analysts note that gold remains a preferred safe-haven asset in the long term, but short-term volatility is likely to continue as investors balance profit-taking with global economic signals.

IANS