Gold prices took a breather on Friday, easing below the ₹3,330 per gram mark after scaling new all-time highs earlier this week. The dip comes in the wake of Federal Reserve Chair Jerome Powell’s fresh warnings about potential stagflation risks looming over the U.S. economy — a rare but dreaded mix of slowing growth, high inflation, and stubborn unemployment.
The yellow metal, often seen as a safe haven in times of economic turmoil, cooled off after an aggressive rally fueled by geopolitical tensions, central bank buying, and inflation fears.
As of Friday morning, 24K gold was trading at ₹3,328 per gram (₹38,713 per 10 grams), down nearly 0.6% from the previous session’s peak. On the global stage, spot gold fell to $2,382 per ounce, snapping its recent bullish momentum.
Powell’s Stagflation Shocker: Market Reacts
Speaking at a policy forum on Thursday, Powell acknowledged that inflation remains sticky and job growth has slowed — raising the possibility of stagflation, a word markets haven’t taken seriously in decades.
“We’re not forecasting stagflation, but we are alert to the risks,” said Powell. “The combination of high inflation and weakening economic activity poses challenges for monetary policy.”
Markets took the comments as a cue for continued caution. While Powell ruled out any imminent rate hikes, he also downplayed hopes for aggressive cuts — dousing investor optimism and sending shockwaves across commodities.
Gold: Still Glimmering Long-Term?
Despite the short-term correction, analysts say the broader trend remains bullish. Central banks, especially from emerging markets, have been hoarding gold as a hedge against dollar volatility and geopolitical risks.
“This dip is more of a healthy pause than a reversal,” said Ankit Mehra, commodity strategist at Quantum Research. “Until inflation cools and global uncertainty fades, gold’s appeal will stay intact.”
Silver prices also followed gold’s lead, dropping slightly to ₹103.80 per gram. However, the yellow metal continues to outshine other asset classes in 2025, delivering over 18% YTD returns — making it the star performer in a choppy economic environment.
Bottom Line
Gold might have lost a bit of its shine today, but don’t write off the rally just yet. As long as the word “stagflation” is even whispered in Fed circles, the glitter of safety isn’t going anywhere.
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