Gold Hits 2-Week Low of ₹87,700, Silver Also Falls
The Indian bullion market witnessed a decline in prices on Friday, with gold and silver both falling to two-week lows. Gold prices plunged by ₹500 to hit a low of ₹87,700 per 10 grams in Delhi, while silver extended its losing streak for the third consecutive day, tanking by ₹2,100 to reach a two-week low of ₹96,400 per kg.
The sharp decline in gold and silver prices can be attributed to a strong rebound in the dollar index. According to Mehta Equities’ Rahul Kalantri, “Gold and silver declined due to a strong rebound in the dollar index.” The dollar index, which measures the value of the US dollar against a basket of six major currencies, has been gaining momentum in recent days, and this has had a negative impact on the prices of gold and silver.
Gold, which had been trading stable for a few days, suddenly took a nosedive on Friday, dropping by ₹500 to reach its lowest level in two weeks. The fall in gold prices was significant, and it is likely that investors are shifting their attention to other investment options. Gold is often seen as a safe-haven asset, and its price tends to rise during times of economic uncertainty. However, with the dollar index strong, investors are opting for other investment options that offer better returns.
Silver, which had been declining for two days, continued its losing streak on Friday, falling by ₹2,100 to hit a two-week low of ₹96,400 per kg. Silver prices have been under pressure for some time now, and the fall on Friday was a result of the strong dollar index and a decline in demand from industrial users.
The decline in gold and silver prices is likely to have a positive impact on the Indian jewelry industry, which has been facing a slowdown in recent months. The fall in prices will make gold and silver more affordable for consumers, and this could lead to an increase in demand. However, the industry is still reeling from the impact of demonetization and the Goods and Services Tax (GST), and it will take some time to recover.
In the global market, gold prices were trading lower, with the spot price of gold dropping by 0.4% to $1,314.90 per ounce. Silver prices were also trading lower, with the spot price of silver declining by 1.2% to $15.95 per ounce.
The fall in gold and silver prices is likely to have a positive impact on the Indian economy, as it will reduce the import bill. India is one of the largest importers of gold and silver, and the decline in prices will make it cheaper for the country to import these precious metals. This could lead to an increase in exports and a reduction in the current account deficit.
In conclusion, the decline in gold and silver prices is likely to have a significant impact on the Indian market. The fall in prices will make gold and silver more affordable for consumers, and this could lead to an increase in demand. However, the industry is still reeling from the impact of demonetization and the GST, and it will take some time to recover. The decline in prices is also likely to have a positive impact on the Indian economy, as it will reduce the import bill and make it cheaper for the country to import these precious metals.
Source: https://repository.inshorts.com/articles/en/PTI/2b2bc2cc-935b-4c03-baf5-108b2b43550e
