gold price
On Monday, the price of gold in the capital Delhi fell by Rs 1,100 to Rs 1.58 lakh per 10 grams. Crude oil prices increased due to increasing tensions in West Asia, due to which investors sold precious metals. According to local market experts, the price of gold with 99.9 percent purity fell by Rs 1,100 from Friday’s closing level of Rs 1,59,900 per 10 grams to Rs 1,58,800 per 10 grams (including all taxes). Silver also came under heavy selling pressure and its price fell by Rs 5,000 to Rs 2,55,700 per kg, which is the fourth consecutive session of decline. On June 2, the price of silver was Rs 2.71 lakh per kg, which has now fallen by Rs 15,300 or about 6 percent.
Why did gold and silver become cheaper?
Experts say that the rise in crude oil prices has changed the environment for precious metals. Instead of benefiting from ‘safe-haven’ demand amid tensions in West Asia, gold has come under pressure as investors worry that higher energy prices could increase inflation and delay monetary policy easing. “Gold continued to fall on Monday, reflecting weakness in global markets due to rising tensions between Israel and Iran. This tension has increased concerns about the outlook for inflation and interest rates,” said Saumil Gandhi, senior analyst of commodities at HDFC Securities.
Gold also fell in foreign markets
In the international market, spot gold fell nearly 1 percent to $4,291.79 an ounce, while silver fell 1.34 percent to $66.93 an ounce. Praveen Singh, head of commodities at Mirae Asset Sharekhan, said gold prices fell sharply in overseas markets due to strong US jobs data and rising tensions in West Asia. Meanwhile, Brent crude oil prices rose as much as 5 per cent to $98.07 per barrel, but later lost some of the early gains after Iran’s military announced the end of military operations against Israel.
Can gold become cheaper?
According to reports, Iran has warned that if Tel Aviv resumes attacks on Lebanon, more stringent attacks will be carried out. Kainat Chenwala, AVP of Commodity Research at Kotak Securities, said that the US Consumer Price Index (CPI) data for the month of May on June 10 is very important. If these figures come out higher than expected (hot reading), then the Federal Reserve’s expectations of increasing interest rates may become stronger, the dollar may strengthen further and further pressure on precious metals may increase. He further said that due to the tightening of monetary policy and the recent increase in tensions between Iran and Israel, the risk appetite still remains towards the downside.
