Similarly, there's a considerable drop in silver prices too. One gram of silver has decreased by Rs. 1 and is selling for Rs. 256. Accordingly, the price of one kilogram of bar silver is Rs. 2,56,000.

What are the reasons for the price drop? 

Three main reasons are cited for the fall in gold prices at the beginning of this year.

Profit-booking in the international market

Since gold prices were at a peak at the end of last December, international investors have started selling gold to book profits. This has slightly reduced the demand for gold in the global market, causing the price to fall.

Value of the US Dollar

 The strengthening value of the US dollar in the international market has reduced investment in gold. The economic rule that gold prices generally fall when the dollar's value rises is reflected here.

Shift in investor focus

With expectations that the US Federal Reserve might cut interest rates in 2026, investors have started shifting from gold to other financial investments.