When there is an environment of uncertainty or decline in the stock market, investors generally turn to gold and silver as safe investments. Even in times of geo-political tension, their demand increases and prices rise. But this time the situation seems different. Despite the increasing tension between America, Israel and Iran and the worsening situation in West Asia, pressure on gold and silver prices remains. On the other hand, tremendous selling is being seen in the stock markets around the world.
On the morning of Friday, March 13, when Indian market When it opened, a huge fall was seen on Dalal Street. Both BSE Sensex and NSE Nifty slipped into the red. At such a time, investors withdraw money from the stock market and invest it in gold and silver, but this time precious metals also seem to be under pressure. That is, this time the traditional mathematics of the market seems to be turning upside down, where along with the decline of the stock market, even gold and silver are not able to provide relief to the investors. Let us understand why this is happening, what is the reason behind it.
Why the simultaneous decline in stock market and bullion market?
In this era of global uncertainties, a decline of Rs 1202 per 10 grams was seen in the price of gold till 2.06 pm today. At the same time, the shine of silver faded even more, where a fall of Rs 5851 per kg was recorded. Now the question arises that when tension is increasing in the Middle East and foreign investors (FIIs) are withdrawing their bags from the stock market, then the prices of gold should have increased instead of falling.
The biggest reason behind this strange situation is the strength in the ‘Dollar Index’. The increase in the value of dollar in the international market simply means that now you will have to pay a higher price to buy gold, which leads to a temporary decrease in demand. Despite the war and rising crude oil prices, the strengthening of the dollar is putting brakes on the rise of gold. This is the reason why the concept of ‘safe haven’ (safe investment) also seems to be struggling in the market today.
What is the condition of gold and silver on MCX?
Gold trading on Multi Commodity Exchange (MCX) was quite volatile today. The price of 10 grams of gold remains at the level of Rs 1,59,059, which is about Rs 1200 below the previous closing price. In the early hours of the morning, gold touched a low of Rs 1,58,746, while its high went up to Rs 1,60,401.
If we talk about silver, its situation is even more delicate. Due to lack of industrial demand and global pressure, 1 kg silver is trading at Rs 2,62,111. The thing to note is that today silver has made a low of Rs 2,60,752, which shows how deep is the selling pressure in the market at this time.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.