Gold has always been considered a safe investment. When there is tension or war in the world, investors tend to invest in it, while uncertainty increases in other markets. However, when peace returns to the world, gold prices tend to fall. Currently, there are many indications that gold prices may fall below Rs 1 lakh per 10 grams in the coming months. Let’s look at four key factors that could contribute to this decline. It is noteworthy that US President Donald Trump is the driving force behind these four.
In fact, over the past few months, gold and silver prices have been skyrocketing due to recession, war fears, and tariff tensions. But now, there are signs that the situation in the world has started improving and relations between countries are improving. Due to this, the confidence of investors in the stock market is increasing again, which is why the shine of gold and silver may fade. Experts say that if some major geopolitical developments take a positive turn, gold prices may fall below Rs 1 lakh per 10 grams.
1. US-China trade agreement
The world’s two powerful countries, the US and China, have been destabilizing global markets for years due to trade wars, tariffs and supply chain tensions. However, there is news that the two are close to a trade deal. The world is about to breathe a sigh of relief. China itself was increasing its gold reserves to compete with the US, which led to a rise in prices. But now the situation is changing. Positive talks are going on between the two countries and a big trade agreement is about to happen. If this happens, investor confidence in the stock market and industry will return. The US-China trade agreement could prove to be a major negative factor for gold and prices could fall.
2. India-US trade agreement
India is the second largest gold consumer in the world. In such a situation, if a strong trade relationship is formed between India and America, it will have a direct impact on gold prices. A new trade agreement will attract foreign investment into India, strengthen the rupee against the dollar and boost economic activity. Buying gold in India becomes cheaper when the rupee strengthens, because we can get the same amount of gold for less rupees. This will lead to a fall in gold prices in the domestic market, even if international rates remain stable. Investors willing to invest in gold may get some relief in the coming months. This will be another big reason which can push gold below Rs 1 lakh per 10 grams.
3. Israel-Hamas ceasefire
The Middle East has always influenced the global economy. The long-running conflict between Israel and Hamas has not only escalated the humanitarian crisis but also created an atmosphere of fear in the global market. Oil prices have soared, supply chains have been disrupted, and investors have bought gold in search of a safe haven. However, now there is news that ceasefire talks between the two sides are progressing. Trump himself is leading the effort. If this is possible, markets will stabilize. Due to this the shine of gold fades. Investors are investing their money in profitable sectors like shares, bonds and real estate. This naturally leads to a fall in gold prices.
4. Ceasefire in Pakistan and Afghanistan
International investors are often cautious due to instability in South Asia. A permanent ceasefire between Pakistan and Afghanistan will increase economic stability and confidence in the region. Although these two countries do not contribute significantly to international trade, a peaceful environment will open doors to trade, investment and regional development. Investors are willing to take risks in such an environment, and when investors return to stock markets, the demand for gold decreases. This means that if the guns fall silent in South Asia, gold prices will also fall. Although America has played a direct and indirect role in these four incidents, but if US President Donald Trump succeeds in managing these four aspects as per his wish, then gold prices are sure to fall.