Gold and silver prices fell heavily today. Gold prices fell by ₹1,600 on the Multi Commodity Exchange (MCX) on the occasion of Chhath Puja. Silver prices also declined on MCX on Monday. Silver with expiry date December 5 fell ₹4,560, or 3%, to ₹1,42,910 per kg in early trade on October 27, ₹1,400 lower than its previous close. Gold prices are expected to fall further in the coming days.
Will gold prices fall further?
Manav Modi, Senior Analyst, Commodity Research, Motilal Oswal Financial Services Limited, says that gold prices are likely to continue to fall in the coming days. A sharp increase in gold prices has been seen in the last few months. After registering its biggest weekly gain in five years just last week, gold prices are now softening. Meanwhile, after a massive rally at the start of the year, silver prices fell more than 5% in just one session as investors booked profits. Now the question arises: Why did gold fall suddenly?
Why did gold suddenly become cheaper?
First, geopolitical tensions between Russia and Ukraine and the possibility of a ceasefire between Israel and Hamas have eased somewhat. Additionally, investor concerns have eased amid expectations of a trade deal between the US and China. US President Donald Trump said on Sunday during the ASEAN summit in Malaysia that “we are going to make a good deal with China.” This week he is also going to meet Chinese President Xi Jinping. On the one hand, tensions between America and China seem to be gradually reducing.
On the other hand, profit booking is taking place after gold reached a record high of $ 4,400 an ounce on Comex and silver prices also increased by more than 85%. Additionally, the market declined heavily due to margin calls and panic selling due to the strong dollar index. Navneet Damani, commodity researcher at Motilal Oswal Financial Services Limited, says prices may fall further by 5-6%. This means that gold may become cheaper by ₹6,000-₹7,000 more.
