The international gold market has recently experienced a notable decline, influenced by various economic factors. As of March 10, 2025, spot gold prices decreased by 0.3%, settling at $2,902.04 per ounce, following a 2% increase the previous week. This downturn is primarily attributed to profit-taking activities among investors, despite ongoing geopolitical uncertainties that typically bolster safe-haven assets like gold.
In Kerala, this global trend has led to a reduction in gold prices. On March 9, 2025, the price of 22-carat gold stood at ₹63,520 per pavan (8 grams). However, by March 11, 2025, prices had decreased, reflecting the international market’s downward movement.
The U.S. economy’s precarious position, teetering on the brink of recession, has significantly impacted global financial markets, including commodities like gold. Recent fluctuations in U.S. trade policy have contributed to investor uncertainty, leading to a temporary sell-off in bonds and a stabilization of currencies. This environment has prompted investors to seek refuge in safe-haven assets such as gold, although profit-taking has led to short-term price declines.
Investor behavior further elucidates the current gold market dynamics. In the week ending February 18, 2025, gold speculators reduced their net long positions by 13,605 contracts, bringing the total to 201,962. Conversely, holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose to 904.38 metric tons, the highest level since August 2023. This dichotomy indicates a mixed outlook among investors, balancing short-term profit-taking against long-term confidence in gold as a hedge against market volatility.
In summary, the recent decline in international gold prices, mirrored in Kerala’s local markets, stems from a complex interplay of profit-taking, geopolitical uncertainties, and concerns over a potential U.S. recession. While some investors are capitalizing on recent gains, others maintain substantial holdings in gold, reflecting its enduring appeal as a safe-haven asset amidst economic instability.
