Gold prices fell down and dropped down to a low of Rs. 25,800 per 10 grams in the nation’s capital. “In the global market, in US dollar terms gold price is at four-year low and in India in rupee terms it is at 15-month low,” Bachhraj Bamalwa, founder partner, Nemichand Bamalwa told IANS.
He further added “The main reasons behind this drop in gold prices is the improving global economy. The US has stopped quantitative easing. After 2008, this year is seen as the brightest year in the global economy. Even global jobs data are showing much better indications. Hence people feel they can invest in riskier assets (like equity markets) and the return from it will be more than gold.”
Bachhraj said that he doesn’t see any more downsides in the gold prices. “I don’t see any further downslide in the price. If that happens then maybe globally a lot of small mines have to shut down,” he said.
However, the next valuable metal, silver, failed to show any such downfall. It is still trading at Rs.34,900 per kilogram. MCX remained close for the morning on the occasion of Guru Nanak Jayanti but was opened in the evening.
The yellow metal traded at Rs. 25,462 per 10 gram with a down of Rs. 31 or 0.12 percent in business turnover of 857 lots. Similarly, the other one traded at a down of Rs. 25,663 per 10 gram with a downfall of Rs. 8 or 0.03 per cent in 9 lots.
Market analysis reflects that the overloading of spectacular arrangement of this balance will mainly put pressure on gold prices in the near future.
This imbalance will lead to increase in gold demand that in turn increases the load on mines, and according to ‘what comes goes around’, prices will again increase following the rule of demand and supply. However, in an another situation people who have invested in the gold, are also expected to sell it out creating an imbalance that won’t be suitable for the mines running around the world.