Gold Prices Slip Below ₹1.50 Lakh in India Ahead Of RBI MPC Announcement, Market Sees Rare Decoupling

Indian gold investors are witnessing a rare "decoupling" this Wednesday, April 8. While international spot gold has rallied to $4,811 per ounce, domestic prices in India have actually slipped below the critical ₹1.50 Lakh mark. This shift follows the breakthrough announcement of a two-week ceasefire between the US and Iran, which has effectively wiped out the "geopolitical war premium" that fueled March's record highs.

As the Reserve Bank of India (RBI) prepares to announce its Monetary Policy decision today, the bullion market is sitting on a knife's edge, balancing global relief against domestic currency pressure.

In early trade, 24-carat gold fell ₹10 to ₹1,49,830 per 10 grams, while 22-carat gold eased to ₹1,37,340. Silver prices also declined by ₹100 to ₹2,49,900 per kg. Across cities, 24-carat gold stood at ₹1,49,980 in Delhi and ₹1,51,190 in Chennai, while Mumbai, Kolkata, Bengaluru and Hyderabad quoted ₹1,49,830. The domestic dip comes despite firm global cues, where spot gold climbed to $4,811.66 per ounce as easing geopolitical tensions reduced fears of an energy-driven inflation spike.

Why Gold Prices is falling in India?

The decline in gold prices is being driven less by global weakness and more by domestic factors.

A key pressure point remains the rupee, which has weakened past the 93-per-dollar mark, making imports costlier and limiting upside transmission from global prices. At the same time, traders are booking profits after the recent rally and holding back fresh bets ahead of the RBI policy outcome.

There is also a broader wait-and-watch approach across financial markets. With bond yields firming above 7% and foreign institutional investors continuing to pull money out, risk sentiment remains fragile - a factor that often feeds into bullion demand dynamics.

RBI policy: What markets are watching

Markets widely expect the MPC to keep the repo rate unchanged at 5.25%, extending its pause amid rising inflation risks. The focus is firmly on the tone rather than the decision. Any signal on inflation trajectory, liquidity stance or currency management will directly influence domestic gold prices. A hawkish tilt could cap gains, while a softer outlook may revive buying interest.

Inflation remains the key constraint for policymakers. Crude oil prices hovering above $100 per barrel continue to threaten price stability by raising import costs and feeding into transport and core inflation. At the same time, uncertainty around monsoon conditions poses risks to food prices. These factors limit the RBI's room to cut rates, as premature easing could weaken the rupee further and intensify imported inflation.

Economists broadly expect the central bank to stay cautious.

Aditi Nayar, Chief Economist at ICRA, said the central bank is likely to remain on hold amid uncertainty around crude oil prices and geopolitical developments, preferring to assess incoming inflation data before taking further steps.

Dipti Deshpande, Principal Economist at Crisil, noted that if inflation stays close to target levels, the RBI may choose to look past supply-side shocks and maintain status quo on rates.

Market participants echo a similar view. Deepak Agrawal of Kotak Mutual Fund has pointed out that while headline inflation remains within the target band, supply-side pressures from energy costs pose durability risks - strengthening the case for a pause.

Across brokerages, the consensus is that this policy is about signalling rather than action, with flexibility being prioritised over commitment.

For bullion markets, the interplay between global cues and domestic policy remains critical.

Globally, gold continues to draw support from geopolitical uncertainty and safe-haven demand. However, in India, currency movements, interest rate expectations and liquidity conditions are playing an equally decisive role.

If the RBI maintains a steady stance with a cautious tone, gold prices may remain range-bound in the near term. A sharper move - either from currency volatility or a shift in policy expectations - could determine the next directional trend.

For now, the market is holding its breath, with the RBI MPC meeting outcome set to provide the next trigger.