Kochi: Gold prices in Kerala have taken an unexpected turn after days of steady gains, surprising both investors and jewellery buyers. Pawan gold slipped by Rs 1,400, settling at Rs 95,960, while per-gram rates fell to Rs 11,995, down by Rs 175. The drop comes on the heels of a remarkable weekly increase of Rs 5,640, when Pawan had reached a peak of Rs 97,360.
For those looking to pawn gold, the current rates mean that a single pawn with a 10 percent processing fee would cost around Rs 1,08,772, with the processing fee alone amounting to Rs 9,596. Gold jewellery prices also factor in hallmarking charges of Rs 53 (Rs 45 plus 18 percent GST) along with a 3 percent GST, adding to the overall cost for buyers.
Analysts point to falling international gold prices as the primary reason behind the decline. The global benchmark, which had reached a record $4,378 per ounce, fell by nearly 2 percent to $4,250. A stronger US dollar and remarks from former US President Donald Trump suggesting that full-scale tariffs on China might be unsustainable contributed to this downward trend. Notably, the international gold price had crossed $4,300 for the first time just last Thursday, highlighting the volatility in the market.
Despite the current dip, gold’s recent rally was fueled by a combination of international economic factors. Expectations that the US Federal Reserve may cut interest rates by the end of the year weakened bond yields and boosted demand for gold. Continuing US-China trade tensions also played a role in driving investors toward the safe-haven asset.
In addition, central banks across Asia and the Middle East have been aggressively purchasing gold, with over 1,000 metric tons reportedly acquired this year. While US inflation has eased slightly from the previous year, it remains relatively high at 3.4 percent, further increasing demand for gold. The world’s gold ETF holdings have reached a two-year high, signaling rising interest in gold as an investment.
Market experts remain divided over gold’s immediate future. Bank of America predicts that gold could surpass $5,000 per ounce by 2026, continuing its upward momentum. J.P. Morgan, meanwhile, forecasts an average price of $4,500 in 2026. Conversely, if US inflation drops below 2.5 percent or the Federal Reserve signals a halt in interest rate hikes, gold could fall below $4,000 per ounce.
For now, Kerala’s gold market is at a crossroads. While today’s dip offers a momentary pause from the recent surge, the interplay of international economic developments, central bank activity, and investor sentiment will determine whether gold continues to rise or sees further declines. Buyers and investors alike are advised to keep a close eye on global signals before making major financial decisions.