Gold, silver drop from record peaks on profit taking, Powell's remarks weigh on metals

Gold and silver prices declined from their record high in the national capital on Wednesday as traders booked profits at elevated levels after US Fed Chair Jerome Powell's cautious tone on rate cuts.

According to the All India Sarafa Association, the yellow metal of 99.9% purity fell ₹900 to ₹1,18,000 per 10 grams (inclusive of all taxes), after the metal scaled an all-time high of ₹1,18,900 per 10 grams in the previous session.

In the local bullion market, gold of 99.5% purity plunged ₹900 to ₹1,17,400 per 10 grams (inclusive of all taxes) on Wednesday. It surged ₹2,650 to hit an all-time high of ₹1,18,300 per 10 grams on Tuesday.

"Gold prices have slightly retreated from their record high, weighed down by a recovery in the US dollar and hawkish remarks made by Federal Reserve Chair Jerome Powell during his speech on Tuesday," said Saumil Gandhi, Senior Analyst, Commodities, at HDFC Securities.

Silver prices also retreated from their record peak, with profit-taking weighing on the metal.

The white metal dropped ₹600 to ₹1,39,000 per kilogram (inclusive of all taxes) on Wednesday after hitting a record high of ₹1,39,600 per kg, skyrocketing by ₹3,220 in the previous market session, as per the Association.

Despite a slight pullback on Wednesday, ongoing geopolitical uncertainty continues to drive safe-haven flows toward precious metals, which helps prevent a major correction in bullion prices, Gandhi added.

In the overseas markets, spot gold fell marginally to $3,760.36 per ounce. It had climbed to hit a fresh peak of $3,791.11 per ounce on Tuesday.

"Spot gold fell as investors booked profits after the record high, though prices have since edged higher and currently trade near $3,760 per ounce, as markets assess Powell's cautious stance and await key US inflation and jobs data," Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

On Tuesday, Fed Chair Powell said rising downside risks to employment outweigh concerns over stubborn inflation, prompting a decision to cut rates in September and marking a shift toward a more neutral policy stance.

Powell acknowledged that inflation remains elevated but suggested tariff-related pressures could be short-lived, reinforcing the Fed's data-dependent approach.

Spot silver was trading 0.38% lower at $43.87 per ounce. The white metal had jumped to hit an intra-day high of $44.48 per ounce on Tuesday.

Renisha Chainani, Head, Research at Augmont, said, "The bullion prices also found support in the current geopolitical tensions in Eastern Europe and the Middle East, which continued to underpin safe-haven demand, limiting the losses for the precious metal."

Chainani added that investors will closely watch commentary by other Fed members in search of additional clues for the monetary policy direction.