Kolkata: Gold has been in the news over the past two years. Every development in the global theatre — from military conflict to the dollar index from a spurt in central banks buying to rate cuts by the US Fed — seems to have a tangible impact on the price of gold. On the morning of Tuesday, May 13, the price of gold was seen declining as the ceasefire between India and Pakistan entered its second day.
According to IBJA (Indian Bullion and Jewellers Association) data, the price of gold was Rs 93,942/10 gms. This was Rs 451n lower than the price of Rs 94,393 on Monday, May 12. The rate of May 12 was a good Rs 2,242 lower than the price recorded by IBJA on May 9, when the tension between the two countries was rising amid air attacks.
Gold contracts for June rose
However, gold contracts for June delivery rose on the Multi Commodity Exchange by Rs 694 to reach Rs 93,595 as speculators created fresh positions. On MCX the business turnover recorded 12,793 lots. Globally, gold futures rose 0.53% to reach $3,253.57 per ounce in New York.
Significantly, gold prices began marching north on May 9 after hostilities escalated between the two countries. IBJA data showed that the price of the yellow metal jumped from May 8 when it was at the level of Rs 96,024 to the level of Rs 96,647 on May 9. Market analysts pointed to triggers such as the geopolitical conflict at the border and uncertainty over ongoing tariff talks between the US and China in Geneva to resolve the tariff war.
India-Pakistan and US-China developments calmed demand
But on Tuesday both factors have worked out in such a way that investor nerves have soothed. While the ceasefire could lead to a durable cessation of hostilities between the two south Asian neighbours, the US and China have reached a temporary truce over the tariff slugfest and indications are there that tariff walls will significantly come down.
On Monday, the value of the Indian rupee against the US dollar increased, thanks to the ceasefire. All these factors had a negative impact on the demand for gold which is a safe-haven metal, the demand for which rises whenever there is uncertainty on the horizon.
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After a few days of spiraling conflict between India and Pakistan, the bullets, and drones, have stopped flying. With the significant calming of nerves, the price of gold is seen climbing down. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
