Steep fall in Gold Price was the trend of this week in India and this trend is however still on. This happening is post the decline which took place in the global market.
A lot of international events are the trigger, which collectively led gold towards the fashion of Downwards trends.
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Downwards trends started with the announcement of Russia’s Covid Vaccine, Sputnik V. This led investors seeking their safe haven elsewhere, rather than Gold, which has been investor’s favourite since Covid hit the world.
Furthermore, the US Federal Reserve Decision was the next event, where new or modified strategies to cope up with inflation were announced.
Changes in monitory policies and interest rates were put forward, following a unanimous voting system. Board of Governors of the Federal Reserve System voted for the newly introduced rates.
Surmounting factor was the fall in Dollar index by 0.2%. This, close to one week low, experienced by the index turned out inexpensive for other currency holders.
When the dollar value fell, gold became cheaper for other currencies, and as INR gained a higher earning capacity, it can now fetch higher weight of gold, at simultaneously lesser price.
However, the trade deals in between China and US are no longer experiencing a back lash, as progress is witnessed.
Also, the US economy is kicking back to its position in March, recovering from the shortcomings caused due to Covid. This is further leading to massive profit gains, which also led to shift in investor’s interest and fall in gold prices.
Though the Gold market is highly volatile, the prices are still on the higher end. There are further lined up events all set to take place in US, while the world also tries to fight the pandemic. This is the reason why Analysts believe there shall be a rising trend witnessed in the price of the metal.
Gold would continue to be bullish as US presidential elections are all set in line, US and China trade frictions risk and also ultra-loose monetary conditions.
Since, the metal is presently trading on a low rate spectrum, buying the metal now with the intention of mid and log terms investment can turn out to be a discounted purchase.
Plus, the US dollar is on the verge of recovery, which will further shoot up the prices of gold. India being a net importer of the metal will experience high prices of gold in local market, while we still continue to fight the Pandemic.
The reason is simple, according to the statistics; South India alone has a demand proportionate to 40% of the entire country’s demand. Such a high demand of the metal makes the gold market hot round the clock, across the entire year.
The perception is related with the status symbol of Gold and how much obsessed South Indian are, with their Gold possession.
Another factor is of Gold being the safe heaven, and the manner in which it can safeguard invested funds. This is not generally witnessed in other forms of investment, especially at the times of inflation.
Present survey points out Kerala precisely as the highest consumer of Gold in South India. South India, especially Kerala has been dominating the gold markets since a long time, and it is just the way of lives for South Indians.
Their lives revolve around the metal, where it is part of their daily routine, festivals and also special occasions.
The past week has been a declining trend for the yellow metal – Gold. The downward trend of the metal is still on, where the metal is losing its value on account of various active events from the global markets.
Gold prices are affected by global markets as the benchmark pricing mechanism of gold is Us Dollar.