The gold which had been considered one of the most secure modes of investment and the much-preferred metal for making jewelry in India has now set records in the last few months in terms of price, thus giving a heavy punch to all the common buyers. But there is some relief for the masses-Calm perchance in gold prices is predicted around the coming few weeks, which would probably help in dribbling cultures away from consumers.
1. Pressure on International Prices
Gold price movements are majorly dictated by global trends. With interest rates now on a steady course in the US and Europe and with the strength of the US Dollar, demand for gold is slowly declining. This should put gliding paperwork onto international prices of gold.
2. Drop in Domestic Demand
On the other hand, gold prices usually go down slightly following major festivals and wedding seasons in India. Meanwhile, jewelers lessened their bulk purchase, forcing some sort of price correction in domestic gold prices, thereby slightly cheapening gold in the local market.
3. Rupee-Dollar Movement
The exchange rate between the Indian Rupee and the US Dollar also plays an important role in defining the gold prices. When the Rupee rises against the Dollar, it is less expensive to buy imported gold. Analysts have said that the Rupee shall stay quite firm for a short while, which shall somewhat keep gold prices low.
4. Fall in Crude Oil Prices
Global crude oil prices recently saw a fall, so that helps keep inflation in check. With inflation in check, central banks, including the Reserve Bank of India, might never hike interest rates. It diverts attention away from gold and toward equity or any other investments, thus further reducing the demand for gold.
5. Political Stability Worldwide
Gold is generally called a “safe-haven” asset during global uncertainty. Without any major geopolitical tensions in the present, safe-haven demand for gold may ease, putting downward pressure on the prices.
Bottom Line
There is a possibility of a price correction in gold in the near future, with all these five factors working in tandem. So this might be a welcome opportunity for buyers and investors to buy gold at pick bnbmt rates. One must, however, keep a close eye on market movements and consider expert financial counsel before engaging in heavy investment.