Wednesday, August 10, 2022

Gold continues to fall, knowing where this round will stop

Last year (2020), when the price of gold on the Indian market exceeded 56,000 grams per 10 grams, people speculated that its price would rise further. At that time, it seemed that corona infection would be difficult to control, and its price would rise further. But the corona infection vaccine changed all the equations. Now, gold has fallen in the Indian market and has now reached the level of 44,000. Some people say that gold can fall below this level.

Vaccination speed and bond yields have lowered the price of gold

In fact, after the rapid corona vaccination, with the development of global economic activity, the price of gold has fallen sharply. The second major reason is the rise in US bond yields. Investors all over the world are investing heavily in U.S. bonds. Big investors are investing in gold to make bond yields attractive. Therefore, the investment in gold in the international market has decreased, which is also the main reason for the decline in its price. In addition, the strengthening of the U.S. dollar has also reduced the demand for gold. Because other currency holders are expensive to buy USD gold.

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Gold has not fallen yet

As far as India is concerned, the international market has had an impact on it. Moreover, as India lowered its tariffs on gold and silver, it has become cheaper. According to PR Somasundaram, Managing Director of the World Gold Council India, due to rising bond yields and falling gold prices, gold ETF holdings fell by more than 2% in February. During this period, global gold ETF holdings fell by 84.7 tons. According to him, this is the seventh largest monthly decline in history so far. SPDR Gold Trust is the world’s largest gold exchange-traded fund, and its holdings reached the highest level of 1,278.82 on September 21, 2020. But as of March 4, 2021, gold has fallen by 200.5 tons, or 15%. Obviously, gold has not fallen yet.

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Nation World News Desk
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