Gold prices in Ahmedabad declined sharply, with the spot rate on the Multi Commodity Exchange (MCX) dropping from ₹1,30,233 per 10 grams on October 28 to ₹1,22,890, a decrease of ₹7,343, or 5.6%.

Even in the international market, gold prices have fallen below $4000 as bullion's appeal as a safe-haven has been somewhat diminished amid indications of an easing of US-China trade tensions, and market players await this week's Federal Reserve interest rate decision.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "After a solid two-month rally, gold prices came under heavy selling pressure last week, with the weakness extending into Tuesday’s session as gold slipped below key psychological levels — $4,000 for gold."

Top Chinese and US economic officials worked on the terms of a trade agreement on Sunday, which will be decided upon later this week by US President Donald Trump and his Chinese counterpart, Xi Jinping. Kalantri adds, "The decline is being driven by a stronger dollar index and renewed optimism over U.S. trade discussions with China and India."

"Gold also faced pressure after the PBoC paused its bullion purchases, with Hong Kong data showing a 17.6% MoM decline in September gold exports to China. ETF outflows further weighed on sentiment, with gold and silver holdings down 0.8% and 1.3%, respectively, from last week’s peaks," said Kaynat Chainwala, AVP- Commodity Research, Kotak Securities.

Sentiment was further influenced by progress on the Gaza peace process, leading to profit-taking across the board.

Dr. Renisha Chainani, Head - Research at Augmont, said, "If Trump and Xi have a fruitful trade summit this week, gold may find itself somewhat in the dark. If the Fed adopts a dovish stance with this week's anticipated rate decrease, however, this might be countered."

However, rupee weakness also supports bullion prices at a lower level. Meanwhile, attention is turning to upcoming central bank meetings, with the Federal Reserve widely expected to deliver a 25 basis point rate cut following weak inflation data, while both the ECB and BOJ are anticipated to maintain steady policy stances, said

"Investors are watching for any forward-looking remarks from Fed Chair Jerome Powell, as it is generally anticipated that the Fed will lower interest rates at the conclusion of its policy meeting on Wednesday," adds Chainani.