Gold prices in the country have been falling non-stop. There is a huge relief for the green buyers. The price of paddy in the country has come down by about Rs.3 thousand in four days. Sulfur prices have fallen below Rs.1 lakh and are showing enthusiasm for buying.
If we look at the prices of sulphide in the last four days from October 12 to 15 in the Telugu states including Hyderabad, compared to October 11, 24 carat gold has decreased by Rs.3,170 per 10 grams and 22 carat gold has decreased by Rs.2,910 per 10 grams. On October 11, the price of 24 carat pasidi was Rs.1,51,420 and today (October 15) it has come to Rs.1,48,250. Also, the price of 22 carat gold has come down from Rs.1,38,800 on October 11 to Rs.1,35,890 today.
These are the main reasons for the fall in gold prices!
Rising inflation in America
The September Consumer Price Index (CPI) in America reached 3.7 percent on an annual basis. It was higher than the market estimate of 3.6 percent. The monthly inflation also increased to 0.6 percent. This has strengthened the expectations on the possibility of the US Federal Reserve raising interest rates. This development has increased the pressure on the prices of gold and silver.
Expectations on increase in interest rates
No interest income is usually available from gold. If interest rates rise, interest in interest-paying investments such as bonds is likely to increase. As a result, the opportunity cost of investing in gold increases. What will be decided on the interest rates in the October and December Fed meetings has now become a key issue in the market circles. Rising expectations on the possibility of a rate hike in December turned negative for crude prices.
Strengthened US dollar
Gold prices are determined in dollars in the international market. A stronger dollar makes gold more expensive for buyers denominated in other currencies. This may put pressure on demand. The US dollar index hit 102.72 on October 14, which was also a factor in the fall in gold prices.
Rise in US bond yields
The US ten-year Treasury bond yield rose to 5.3 percent on October 14. Higher bond yields increase investors' interest in alternative investments. This will reduce the buying pressure on gold. Both the strengthening of the dollar and the rise in bond yields have had a negative impact on greenback prices.
What will gold prices look like?
US inflation figures, Federal Reserve interest rate decisions, dollar movements, and bond yields will affect the direction of gold prices. But it cannot be said that the same trend will continue every time the prices fall. On October 15, Reuters reported that gold prices rebounded due to the weakening of the dollar and falling bond yields in the international market.
Today's gold prices in the major cities of the country are as follows. rounded">1/4 (Disclaimer: The above gold and silver prices are indicative only. These are subject to GST, TCS, other taxes, (Duties may be additional. Check with your local jewelry store for exact pricing.)
