Gold prices experienced a slight decline on November 15, signaling its worst week in over three years. Spot gold was trading at $2,562.61 per ounce, down 0.1%, marking a decrease of more than 4% for the week. Furthermore, US gold futures also saw a decrease of 0.2%, standing at $2,567.10.

In India, the price of 10 grams of 24-carat gold in Delhi dropped to Rs 75,813 on Friday, a significant decrease of Rs 1,200 from previous rates. On November 14, the price of 24-carat gold in India was Rs 74,620 per 10 grams, while 22-carat gold stood at Rs 68,402 per 10 grams.

The decline in gold prices was largely attributed to the strength of the US dollar. Despite this, spot gold saw a slight increase to $2,569.69 per ounce, a marginal uptick of 0.1% after five consecutive sessions of decline.

The US dollar rally persists in the wake of Donald Trump’s election win, diminishing the appeal of Gold as a safe haven asset. Investors are now exploring alternative options in light of Fed rate cuts and the strength of the dollar. 

Additionally, inflation data in the US and the Fed indicating a potential pause to control inflation are contributing to downward pressure on gold rates.

Moreover, the recent increase in value of cryptocurrencies such as Bitcoin, reaching $93,000 per coin, has captivated investor attention, leading to a shift of funds away from precious metals.

Rahul Kalantri, Vice President of Commodities at Mehta Equities, pointed out that the weakening of gold prices can be attributed to the surge in the US dollar alongside growing investor interest in cryptocurrencies.

Jateen Trivedi, VP Research Analyst – Commodity and Currency of LKP Securities, said: “Gold’s weakness persisted with price falling below 2550$ and near Rs 73,500 in MCX as the dollar climbed above 106.50 and edged closer to 107. The US CPI data, which came in higher at 2.6% compared to the expected 2.4%, fueled the dollar’s strength. While the Fed has been continuing with rate cuts as inflation approached its 2% target, the higher-than-expected CPI reading raises concerns that further cuts may be paused. This development added pressure on gold prices, which reacted negatively to the stronger dollar and the potential shift in Fed policy.”

How should you now invest in gold?

Analysts maintain a positive long-term outlook for gold despite the obstacles, particularly in the case of persistent economic uncertainty.

“With the reduction in import duties earlier this year, there has been a significant surge in demand for gold. We even saw a surge during the Diwali-Dhanteras period. This reflects the consumer’s growing recognition of gold’s unique ability to balance investment portfolios while at the same time honouring our festive traditions. Furthermore, there is an increasing understanding of holding precious metals in an investment portfolio with the recent uptick of silver too. India entered the festive season which will last till Christmas and New Year. It also heralds the wedding season which will further drive demand for gold. Given these factors, it is expected gold to maintain its momentum through early 2025,” said Vikas Singh, MD and CEO of MMTC-PAMP. 

So what should investors do? Investors might consider capitalising on the current market downturn, as gold has historically shown resilience during times of economic uncertainty. Nevertheless, with projections of elevated interest rates and stabilizing inflation rates, the immediate prospects for gold may be tempered