Gold prices witnessed a notable decline on May 15, 2025, as global investor sentiment shifted back toward riskier assets following positive economic indicators. In India, gold slipped by ₹300 to trade at around ₹68,150 per 10 grams, reflecting a broader global trend driven by improved risk appetite in equity markets.

The key trigger behind the move was the release of April inflation data from the United States, which came in at 3.1%, slightly lower than market expectations. The cooling of inflation has boosted investor confidence that the U.S. Federal Reserve might hold off on further interest rate hikes. This, in turn, fueled a rally in equity markets globally, prompting a temporary rotation out of safe-haven assets like gold.

Gold, traditionally seen as a hedge against inflation and financial uncertainty, tends to lose appeal when market conditions stabilize and yields from other asset classes—especially equities and bonds—become more attractive. With inflation seemingly under control and the Fed signaling a potential pause, traders are finding more value in risk-based investments.

On the international front, spot gold fell below the key $2,330 per ounce mark, as the U.S. dollar weakened slightly and Treasury yields retreated. However, the drop was cushioned by sustained central bank buying from emerging markets, especially China and Turkey, where gold remains a core part of foreign reserve diversification strategies.

In India, jewellers and traders expect gold demand to stay resilient in the medium term despite short-term price corrections. The upcoming wedding season and cultural festivals typically drive higher consumption. Furthermore, geopolitical uncertainties, including ongoing tensions in Eastern Europe and the South China Sea, could revive safe-haven demand, keeping gold prices relatively supported.

Market analysts advise investors to monitor macroeconomic indicators such as upcoming U.S. jobs data, central bank commentary, and crude oil prices. Any signs of a resurgence in inflation or global tensions could quickly reverse the current trend and push gold prices back up.

For now, the sentiment has clearly shifted in favor of riskier bets, and gold may remain under pressure unless new uncertainties emerge. Long-term investors are advised to use such dips as buying opportunities, while short-term traders might look at further downside potential if risk-on sentiment continues.