Day after historic high, gold price records sharp fall in Chennai; fluctuations to continue, say traders

CHENNAI: After surging ahead by Rs 2,200 per sovereign on Tuesday to touch historic highs, the price of gold crashed by an almost identical amount in Chennai on Wednesday, reflecting the trend witnessed in the international market.

According to industry veterans, the wild swings are expected to continue in the near future, till the looming trade war triggered by US President Donald Trump is settled.

On Wednesday, the price of gold in the city decreased by Rs 2,200 per sovereign, with a gram costing Rs 9,015 on Wednesday. A sovereign was priced at Rs 72,120. Incidentally, the fall came a day after the price recorded a sharp rise, with 22-carat gold soaring to an all-time high of Rs 9,290 per gram — working out to Rs 74,320 per sovereign (8 grams).

Reports from abroad said many people tried to book profit after Tuesday’s record high, which only brought the price down drastically.

When asked, veteran gold retailer Jayanthilal Challani blamed it on the US’s trade policy decisions after Donald Trump returned as the president. “About 60 more days are left for the tariff pause period to end. Till a final word emerges, such fluctuations will continue almost on a daily basis,” Challani told DT Next.

The sharp rise would affect consumer sentiment, with many of them deciding to postpone purchase. However, it does not take the sheen away from gold as a safe investment, he said. “Consumers should look at gold only as a long-term investment. Beyond daily and short-term fluctuations, gold price has only gone up over the years,” Challani pointed out.

He added that Akshaya Tritiya that is falling on April 30 has no connection to the rate fluctuations.