The price of gold is going through anxious times. There seem to be quite a few events that are taking place in quick succession, all of which have an impact on the price of the precious metal.
Let’s consider them one by one. There are clear indications that the US central bank needs to slash interest rates in order to ward off the apprehension of the world’s largest economy tiptoeing into recession, a situation that would not only create trouble within that country but trigger extremely nervous signals to almost every economy in the world.
If interest rates are brought down by the US Federal Reserve, it would push up the price of gold, since investors would channelise funds into the “safe haven” instrument.
Hope of 50 basis point cut by US Fed
According to reports, traders hoped for a reduction of the interest rate by 50 basis points when the FOMC (Federal Open Market Committee) meets in September to discuss the matter. CME FedWatch, which offers a glimpse of the market’s expectations for future monetary policy that reported it also said that another rate cut is expected in December.
Govt intervention in Budget
Significantly, the prices of gold in India dropped after Finance Minister Nirmala Sitharaman announced that import duty on the metal was being reduced from 15% to 6%. The move hugely benefitted the jewellers as well as the investors.
“The dip in prices that followed the Budget was due to government intervention. Gold prices usually rise in August. Then prices come down with the advent of Durga Puja and Diwali in October providing a bit of respite to the customers who begin buying both for the festive season and the wedding season that follows in winter,” said Joydeep Sircar, director, B Sirkar Johuree, a brand in Kolkata that is more than 100 years old.
Price down on August 6, 2024
According to GoodReturns, the price of 22 carat gold in India on Tuesday (11 pm), August 6 went down by Rs 80 to touch Rs 6,390 per gram. The price of 24 carat gold dipped by Rs 87 to reach 6,971. The price of 18 carat gold fell by Rs 66 to touch Rs 5,228.
The price of gold fell on August 6, 2024. But hopes of Fed rate cut and rising demand in India could help it rise. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
