Kolkata: After the country woke up to the news and images of Operation Sindoor — India’s retaliation by firing missiles at terror sites in nine spots in PoK and Pakistan — gold prices rose on Wednesday morning. According to IBJA (India Bullion and Jewellers Association) data, the price of Gold 999 rose by as much as Rs 732, or 00.75%, to reach a level of Rs 97,493 when compared to Rs 96,761, the price on Tuesday, May 6.
It is well known that the price of gold appreciates during times of uncertainty and investors had enough reasons on Wednesday morning to feel a bit nervous. Significantly the Indian stock market, too, opened lower and demonstrated extended volatility. It remains to be seen how the price of gold behaves during the next few days as geo-political tension reaches the very border of India, one of the largest consumers of gold in the world both in the form of jewellery and investment.
Gold prices in the past five days
According to IBJA data, the opening price of 10 gms of gold 999 in the past five days was the following Rs 96,761 (May 6), Rs 93,734 (May 5), Rs 93,393 (May 2), Rs 95,689 (April 30) and Rs 96,286 (April 29). The term “999” on gold signifies its purity. It means that the gold is 99.9% pure, with only 0.1% of another metal. This is nearly equivalent to 24-karat gold, which is considered the purest form of gold. Therefore, it is clear that the price of gold sharply reversed its decline on May 6 and 7. Heightened tension across the border was felt from Tuesday (May 6), when shelling increased from across the border and the stock markets, too, felt the pressure, ending down after the trading session.
Why was gold price going down
The price of gold often mirrors the uncertainty in the air. Gold, in fact, thrives on crisis and tension. Gold prices rose sharply when US President Donald Trump roiled the world markets with his retaliatory tariffs. The weakening dollar was also helping the upward pressure on gold prices. But then Trump issued an executive order stating that Washington will relax 25% tariff on automobiles and auto parts that soothed investors’ nerves somewhat. He also signalled a 90 day suspension of the tariffs. The US dollar also gained strength to help prices cool a bit. Also, some of the investors rushed to book profits after prices of gold kissed the psychologically important level of Rs 1 lakh/10 gms.
US Fed announcement
There is another factor at play. The US Federal Reserve — US Fed in short — is expected to make its announcement on key policy rates on May 7. The US president is in favour of a cut in rates but some analysts think US Fed chairman Jerome Powell might keep rates unchanged. If the rate is cut, it will again raise gold prices. But this time, the factor closer to India’s borders can be a crucial decider too.
Silver prices rise in futures market
On Wednesday, silver prices rose by Rs 59 to reach a level of Rs 96,760 per kg in futures trade. As participants raised bets on MCX silver, silver contracts for July delivery went up Rs 59, or 0.06%, to Rs 96,760 per kg in a business turnover of 16,568 lots. The price in New York, however, the price of the white metal was trading 0.50% lower at $33.05 per ounce.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
Gold has always been cherished as a safe-haven asset, the value of which goes up during any geo-political crisis. The price of the yellow metal jumped on the morning of India striking back in PoK and other areas of Pakistan to retaliate following the Pahalgam terror attack. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
