Gold prices fell more than 1% in the early morning of September 4, 2025, as investors reacted to the recent Goods and Services Tax (GST) reforms, which spurred increased risk appetite in the market. On the Multi Commodity Exchange (MCX), gold futures for October delivery dropped 1.21% to ₹1,05,897 per 10 grams, while silver futures for December delivery fell 1.6%, trading at ₹1,23,871 per kilogram.
The sharp decline in gold and silver prices coincided with a surge in domestic stock market benchmarks, with the Sensex and Nifty 50 both jumping by nearly 1% on the back of significant reform in India’s indirect taxation system. Finance Minister Nirmala Sitharaman’s announcement of GST rate cuts on various consumer goods, aimed at boosting consumption and driving economic growth, has sparked optimism among investors. The GST reforms are expected to increase India’s GDP growth by about a percentage point over the next four to six quarters.
While the announcement of the GST reforms was a key factor in driving investor optimism, weak global cues also contributed to the decline in precious metal prices. International gold prices softened as profit-taking emerged following recent highs. Gold had seen an upward trend in the past few sessions on expectations that the U.S. Federal Reserve would likely cut interest rates later this month. The U.S. Labor Department’s job opening data indicated a slowdown in the labor market, adding to speculation that the Fed will reduce rates by 25 basis points during its upcoming meeting on September 17.
Experts Advise Caution in Gold and Silver Investments
As gold and silver prices hit their target levels, experts suggest that traders and investors consider booking profits and wait for potential price corrections before initiating fresh positions. Manoj Kumar Jain, a commodity analyst at Prithvifinmart Commodity Research, advises booking profits in gold as the price has reached the target of ₹1,07,000 per 10 grams, while silver prices have also neared their target of ₹1,27,000 per kilogram. Jain recommends waiting for corrective dips before entering new positions in both metals.
For those continuing to trade in gold and silver, support and resistance levels have been identified for today’s session. Gold has support at ₹1,06,500-1,05,800 and resistance at ₹1,08,000-1,08,850, while silver has support at ₹1,24,850-1,23,500 and resistance at ₹1,27,000-1,28,500.
Global Factors and Local Impact on Gold Prices
In the global context, gold prices are influenced by a mix of market sentiment, U.S. Federal Reserve policy expectations, and geopolitical factors. With investors shifting their focus towards equities and riskier assets following the GST reforms, the demand for gold as a safe-haven asset has weakened temporarily. However, analysts suggest that gold could still find support at lower levels and may see renewed interest if global uncertainties resurface.
As the market continues to react to both domestic and international developments, investors are advised to stay informed about market trends and adjust their strategies accordingly.
Image Source: Google | Image Credit: Respective Owner
