Gold prices saw a steep fall in Kerala and in global markets on Wednesday, marking one of the sharpest declines in recent times. In Kerala, the price of gold dropped by ₹395 per gram in the morning to ₹13,645. The price of one pavan fell by ₹3,160 to ₹1,09,160. The decline matched earlier market expectations that a major correction was likely.
Internationally, gold prices fell to their lowest level in six months. The metal slipped by more than $150 an ounce to around $4,180. The drop came amid renewed tensions in West Asia involving Iran and the United States, a rise in crude oil prices, and gains in the US dollar and bond yields, all of which pressured gold. Investors closely watched these developments as they reduced demand for the safe-haven asset.
A key factor behind the fall was the anticipation of the latest US inflation data, which was scheduled to be released later in the day. Market expectations suggested that inflation may remain elevated. If inflation rises, the US Federal Reserve could respond by increasing its benchmark interest rate. Such a move would likely push international gold prices down further because higher interest rates generally reduce gold’s appeal.
Analysts also warned that if international gold prices fall below $4,000 an ounce, the price of a pavan in Kerala could move closer to ₹1 lakh or even below that level. On the other hand, if tensions in West Asia ease, crude oil prices soften, and the dollar loses strength, gold prices could recover. Any fresh buying interest from consumers taking advantage of lower prices may also support a rebound.
In Kerala, prices of lower karat gold also declined sharply. According to the All Kerala Gold and Silver Merchants Association, 18-karat gold fell by ₹330 per gram to ₹11,270, while silver dropped by ₹10 per gram to ₹250. The Kerala Gold and Silver Merchants Association set the 18-karat rate at ₹11,215 per gram, silver at ₹250, 14-karat gold at ₹8,735 per gram after a ₹250 fall, and 9-karat gold at ₹5,630 per gram after a ₹165 decline.
A similar trend was seen in Dubai. Gold prices there fell by 10 dirhams per gram. The price of 24-karat gold dropped to 503.50 dirhams per gram, while 22-karat gold fell to 466.25 dirhams. On May 12, the rates had been much higher, at 567.25 dirhams for 24-karat gold and 525.25 dirhams for 22-karat gold.
The fall in prices has improved demand for 22-karat gold, especially ahead of the holiday and wedding seasons. Traders and consumers are viewing the correction as an opportunity, and the lower rates are expected to boost market activity in the coming days.
