Today a decline is being seen in the prices of gold. Investors booked profits after yesterday’s rally – and today they have seen further losses due to rising global crude prices and rising geopolitical tensions in the Middle East. In the international market, gold prices had crossed the $4,100 per ounce level (two-week high) yesterday, but today they are trading at $4,052.50 per ounce, which shows a decline of about 1-2%.
**How much have prices fallen?**
In the local bullion market, gold prices fell by ₹1,100 to ₹1,46,170 per 10 grams, as against yesterday’s high of ₹1,47,280. The price of 22-carat gold also fell by ₹1,010 to ₹1,33,990, from ₹1,35,000 earlier. Similarly, 18-carat gold became cheaper by ₹830 to reach ₹1,09,630 per 10 grams today.
**Why did gold become cheaper?**
Crude oil prices have crossed $100 per barrel due to tensions between the US and Iran and attacks on ships by Houthi rebels in the Red Sea. Rising oil prices have created fears of global inflation. As a result, investors are selling assets like gold to make profits and prefer holding cash, leading to a decline in gold prices. Additionally, it is increasingly likely that the US Federal Reserve will raise interest rates to curb inflation; The market expects rates to increase in September. When interest rates rise, people reduce their investments in non-interest bearing assets like gold.
**The shine of silver remains**
On the Multi Commodity Exchange (MCX), silver for September contract is trading at ₹2,27,180 per kg. This shows that despite the global crisis, investors are betting on silver due to industrial demand. In the domestic retail market, silver prices have reached ₹2,39,900 per kg. Apart from jewellery, silver is also used in solar panels, electric vehicles and 5G chips, hence due to increase in demand its price has increased today as compared to yesterday.