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Gold price falls by ₹2300: is this the right time to purchase?

The gold future contract for April of 2023 went ahead and ended at ₹56,560 for 10 grams on the MCX (the Multi Commodity Exchange), which was around ₹2,300 than its latest highs. Interestingly, this sudden plunge in the gold prices was witnessed not only in domestic markets but in international markets as well. The price for what gold was recorded at 1,864 for every ounce on Friday, which locked a weekly loss of somewhere around 3.23%. 

One of the market experts was asked for particular reasons as to why the prices of gold could be witnessing this drop from their lifetime highs. Their response was that during the first policy meeting for this year, the US central bank procedure to raise the rates on expected lines by about 25 BPS to reach the target ranges of 4.5% to 4.75%. At the same time, they kept acknowledging the price and maintained a sort of dovish stance on the entire matter. Parallelly, the BOE and ECB proceeded to go with the dovish stance as well. At the same time, they kept increasing the borrowing costs by approximately 50 BPS, which only instigated the flows toward the US dollar and triggered a retreat from its lows. 

Further on, the expert mentioned that the US jobs report had mentioned of the existence Of a considerably vigorous labor market whereby the payrolls of the non-farm kind were up by 517,000 jobs in the month of January, which was much higher than the initial Expectations of 185,000 job additions. The unemployment rate also slipped down to 3.4%.

The average hourly earnings procedure was to take a hike by 4.4% in the month of January as compared to the 4.9% in the month of December, which had a clear indication towards the lessening of the wage inflation. Because of these impressive figures in the market, the dollar index was further reinforced and proceeded to accelerate this slide in gold prices.

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