There was a sharp fall in the prices of gold and silver on Thursday evening. Both metals fell to multi-week lows on the Multi Commodity Exchange (MCX), while tensions still persist in the Middle East.
Big fall in gold
Gold futures for April delivery fell ₹8,810 to ₹1,44,215 per 10 grams, the lowest since early February. So far in the month of March, gold has fallen by about 11% and this year’s return has come down to only 6.60%.
More weakness in silver
The fall in silver was sharper. Its price fell by ₹25,500 to ₹2,22,234 per kg, which is the lowest level since December. Silver has fallen 21% so far in March and is moving towards decline for the second consecutive month.
What are experts saying next?
According to experts of LKP Securities, gold remains weak at present. There is resistance around ₹1,50,000, while strong support is seen between ₹1,44,000-₹1,42,000. There may be fluctuations in the market in the short term.
What is the major reason for the decline?
Generally, gold and silver are considered safe haven in geo-political tensions, but this time the situation is opposite. The Federal Reserve (Fed) has postponed cutting interest rates and has indicated a cut only once. At the same time, Jerome Powell said that unless inflation comes down, rate cut is difficult.
Due to Middle East tension, oil and gas prices have increased, due to which the risk of inflation has increased. In such a situation, interest rates may remain high. Which is negative news for gold, because it does not earn interest.
Dollar strength also creates pressure
Amidst the tension, investors are moving towards the US dollar which is considered safe. Due to this, the dollar has strengthened, due to which the demand for commodities like gold and silver decreases.
Decline in international market also
In the international market COMEX, gold also fell by $304 to $4,580 an ounce, which is the lowest level since February. Silver fell by $10.35 to reach $67.23 per ounce, which is the lowest since February 6. Overall, there is weakness in gold and silver at present. Due to inflation, strong dollar and uncertainty regarding interest rates, their movements may remain volatile in future also.