New Delhi: The bullion market in the national capital, Delhi, witnessed surprising fluctuations for investors on Thursday. While gold prices saw a significant drop, silver prices registered a sharp increase.
Sharp fall in gold prices
According to the All India Bullion Association, the price of 99.5% purity gold fell by Rs 1,000 to Rs 122,800 per 10 grams, down from Rs 123,800 on Wednesday. Similarly, 99.9% purity gold also fell below Rs 124,400.
The main reasons for this decline were two major international economic events, the US Federal Reserve’s statement and positive signals from the US-China trade talks.
Impact of the Federal Reserve’s statement
The Federal Reserve recently made a modest cut in interest rates, but Chairman Jerome Powell indicated that further rate cuts were unlikely.
This hawkish stance led to a strengthening of the US dollar and bond yields. Since gold is traded in dollars in the international market, a stronger dollar makes gold more expensive for investors. As a result, the demand for gold decreased, and prices fell.
Impact of improved US-China relations
The second major reason was the easing of trade tensions between the US and China. News of a potential agreement between US President Donald Trump and Chinese President Xi Jinping boosted investor confidence.
When global tensions ease, the demand for gold as a ‘safe haven’ investment decreases, negatively impacting its price.
Sharp surge in silver prices
While gold fell, silver showed a strong surge. The price of silver increased by Rs 3,300 per kilogram, reaching Rs 155,000. According to experts, this surge is due to increased industrial demand, as silver is increasingly used in electronics, solar energy, and medical devices. International Market Situation
The situation in international markets, however, was slightly different. On the international level, spot gold rose 1.36% to $3,983.87 per ounce, while spot silver climbed 1.21% to $48.14 per ounce.
Gold Reserves in India: Which Indian States Top with Massive Gold Reserves
A 0.12% strengthening of the dollar index kept pressure on gold prices in the domestic market. Analysts are now awaiting further statements from Federal Reserve officials to gauge the future direction of prices.
Overall, international economic indicators pulled the gold and silver markets in opposite directions. While investors had an opportunity to buy gold at a lower price, it proved to be an expensive day for silver buyers. It will be crucial to monitor the Federal Reserve’s policies and the global trading environment in the coming days.