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Silver fell by Rs 7,800 in a month, gold fell by Rs 3,200, these are 8 reasons

Sagar Patel

By Sagar Patel

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Who would have imagined about a month ago that silver, which was around Rs 1 lakh per kg, would come down to Rs 90 lakhs? When gold was galloping, everyone was sure that this precious metal would reach a new level. The price that is currently being seen. It seems very difficult to believe even that. In the last month, gold has fallen 4.25 percent from its record level. On the other hand, the price of silver has dropped more than 8 percent.

In the last one month, gold has fallen by Rs 3,200 from its record level. At the same time, silver has also become cheaper by more than Rs 7,800. For this, only 4 national and 4 international reasons are given. Speaking of local reasons, the physical demand is less. Profit accounting is done by investors. The impact of the monsoon is being felt in rural areas. Furthermore, to make profits in rural and urban areas, people sell their old gold.

Speaking of international reasons, the dollar index is high. The Federal Reserve will cut rates once this year instead of three. Buying in China costs less. So the demand is being seen less. On the other hand, selling is being seen in gold ETFs. Let us try to understand in detail how these 8 reasons have affected the prices of gold and silver in a month.

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There is a drop in the price of gold.

These are those local factors.

  1. Less physical demand: According to experts, in recent months the demand for physical gold is much lower. During this period there is no holiday or wedding season. Due to which gold prices look low.
  2. Profit booking by investors: There has been a significant increase in gold prices in the first half of the year. The price of gold has increased by up to 15 percent. Due to which profit booking is done on behalf of the investors. The effect of this manifests itself in the form of a reduction in the price of gold.
  3. Monsoon effect weight: The effect of monsoon is quite visible in the prices of gold and silver. A good monsoon is very important for farmers’ income, especially in rural areas. If there is good performance, the profits will be good. After which the demand for gold and silver increases in rural areas. In such a situation, farmers wait for monsoon oil. Currently rural demand is low.
  4. People who sell old gold: This is the time when people are busy making profits by selling their old gold. At the same time, farmers also sell antique jewelry and buy agricultural-related products. Due to this, a large amount of old gold comes to the market and due to lower demand, gold prices go down.
Gold Price and Akshaya Tritiya (3)

The price of gold has declined more than 4 percent from its all-time high.

International factors for gold and silver to become cheaper

  1. Maximum dollar index: Currently the gold rate is considered high. Therefore, pressure is being seen on gold prices in the international market. Currently the dollar index is at the level of 105.38. There has been an increase of about 4 percent in the current year. In the last month, an increase of 0.73 percent has been observed.
  2. Reduction of interest cuts by the Fed: The US Central Bank had previously said it would cut interest rates three times during the current year. Which has been reduced to just one. This means that performance will increase. The effect of this is clearly visible in the prices of gold and silver.
  3. Less purchases from China: After record gold buying for 18 consecutive months, China has somehow put an end to gold buying. Therefore, international demand is being seen very less. For this reason, there is no such rise in the price of gold in the international market. On the contrary, prices have fallen.
  4. Sell ​​on Gold ETFs: As we said, there was an increase in gold prices in the first half of the year. In addition to physical gold, investors were also investing heavily in gold and silver ETFs. Now the sale has started. Due to which there is a fall in the price of gold.
Gold Price and Akshaya Tritiya (4)

Currently, gold is trading below Rs 72,000 on MCX.

Gold and silver figures in the local market

On Tuesday, gold and silver prices are trading lower on the Multi Commodity Exchange. At 11:15 am, the price of gold fell by Rs 78 per ten grams and was trading at Rs 71,713. However, today gold opened at Rs 71,712 and after the market closed a day earlier on Monday, the price of gold was seen at Rs 71,791 per ten grams.

On the other hand, there is a continuous fall in the price of silver on the Multicommodity Exchange. According to the data, at the same time, silver is trading at Rs 88,960 on MCX with a slight decline of Rs 39. However, silver opened at Rs 88,837 on Tuesday and was seen at Rs 88,999 after the market closed a day earlier.

gold price

Physical demand for gold has reduced significantly, the effect of which is reflected in prices.

How much cheaper did gold and silver become than the record?

Firstly, if we talk about gold, on May 20, gold had hit a record high of Rs 74,777 on MCX. While on Tuesday, gold hit its lowest level of the day at Rs 71,590. This means that the price of gold has become cheaper by Rs 3,187, or 4.28 percent.

On the other hand, the price of silver has decreased significantly compared to gold. According to the data, on May 29, silver had touched a new high of Rs 96,493. Which reached Rs 88,667 per kg during the trading session on Tuesday. This means that silver has seen a drop of 8.11 percent i.e. Rs 7,826 per kg.

Gold price (1)

Nowadays people sell their old gold and make profits.

What do the experts say?

Anuj Gupta, head of monetary commodities at HDFC Securities, said there is currently no active trigger to increase gold and silver prices. Currently, local factors are quite dominant. Physical demand is low locally and internationally. Now even the CAD has turned positive in the country. The effect of which will be seen in the market. On the other hand, gold and demand will depend a lot on the monsoon. Currently there are no festivals or wedding season. So we are seeing a drop in prices.

Sagar Patel

Sagar Patel

I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,

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