A big fall in the prices of gold and silver was seen in the country’s capital Delhi. Where the price of gold fell below Rs 1.50 lakh. Whereas the price of silver came to Rs 2.30 lakh. For the past few days, due to inflation concerns, there has been a decline in the prices of gold and silver. In fact, all the central banks around the world have indicated to put interest rates on hold or increase them. Due to which the dollar index is seeing a rise. This is the reason why the prices of gold and silver are falling. However, in the international market last week, the biggest fall in the prices of gold and silver was seen after 40 years. Let us also tell you what the prices of gold and silver have become in the country’s capital Delhi…
How much did gold and silver become cheaper in Delhi?
According to All India Bullion Association, gold of 99.9 per cent purity fell by Rs 9,050, or about 6 per cent, to Rs 1,43,600 per 10 grams (including all taxes), which is lower than Friday’s closing price of Rs 1,52,650 per 10 grams. Silver also fell by Rs 10,500, or 4.36 percent, to Rs 2,30,000 per kg (including all taxes). In the last trading session, this white metal had closed at Rs 2,40,500 per kg.
Why did the decline occur?
“Last week’s decline in precious metals continued, and spot gold slipped to a four-month low in intraday trading on Monday,” said Saumil Gandhi, senior analyst, commodities, HDFC Securities. He attributed the sharp fall to rising tensions in West Asia, which pushed up oil prices and raised inflation concerns, raising the possibility of a tighter monetary policy. “The prospect of tighter monetary policy has raised concerns about the US economy,” Gandhi said. Treasury bond yields rose and the dollar strengthened, putting further pressure on gold and silver.
Decline in international market also
In the international market, spot gold fell $227.42, or 5.06 percent, to $4,263.73 an ounce, while silver fell $4.25, or 6.3 percent, to $63.53 an ounce. Spot gold continued to fall in overseas markets as expectations of rising interest rates weighed on prices, said Praveen Singh, head of commodities at Mirae Asset ShareKhan. He said gold prices fell by more than 10 percent last week, its biggest weekly decline in more than four decades, as expectations of a rate cut have now turned to a possible rate hike. NS Ramaswamy, head of commodity and CRM at Ventura, said the recent oil crisis caused by the Iran conflict has cut off sources of income for countries that were building gold reserves.
Will gold gain momentum again?
He further said that due to low surplus, the pace of accumulation of reserves slowed down and the demand for gold also reduced, whereas gold had been serving as the preferred alternative reserve currency. Gold performs well in such a crisis, but the disruption in global capital flows has strengthened the gold bull market. Ramaswamy said that the central bank will not abandon its strategies of accumulating gold reserves due to this temporary decline in earnings. When oil flows return to normal and surpluses increase again, demand for gold will pick up again.