Kochi : The recent correction in gold prices has sparked widespread discussions among buyers and investors in Kerala. While minor price dips offer temporary relief, questions remain on whether 22K gold will breach the ₹1,000,000 mark (per sovereign/8 grams) on the downside.
Factors Driving the Recent Price Correction
Gold rates in Kerala are currently oscillating around ₹1.10 lakh to ₹1.13 lakh per sovereign. Key global factors driving this consolidation include:
Strengthening US Dollar: A rebound in the US dollar index makes bullion relatively expensive in foreign markets, curbing short-term international demand.
Profit Booking: Institutional investors booking profits at record highs led to minor downward corrections on international exchanges like COMEX.
Will Gold Drop Below Rs 1 Lakh?
Financial analysts and market experts suggest that a fall below the ₹1 lakh benchmark per sovereign is highly unlikely in the near to medium term. The key underlying factors preserving high base prices include:
Central Bank Reserves: Global central banks continue aggressively building gold reserves to hedge against economic uncertainties.
Currency Depreciation: Depreciation of the Indian Rupee against the US Dollar keeps domestic import costs high, restricting price drops locally.
Domestic Festive Demand: Steady wedding and seasonal demand across India keeps a strong floor beneath domestic market rates.
While short-term volatility and range-bound movements will continue, expert forecasts indicate consolidation between ₹1.05 lakh and ₹1.15 lakh per sovereign rather than a steep crash.
