Gold prices continued to fall for the 5th consecutive day. Which reached its lowest level of 8 weeks on 14 November (Thursday). The price of 24 carat gold in India on November 14 stood at ₹74,620 per 10 grams, while the price of 22 carat gold stood at ₹68,402 per 10 grams. Let us know why gold prices have fallen.
Gold is often seen as a hedge against inflation or any financial problem, but in the last few days, gold prices have been continuously falling. Spot gold fell 0.4% to $2,563.45 an ounce, while US gold futures fell 0.7% to $2,568.30 an ounce.
Reasons for decline in gold?
The US dollar strengthened and Treasury yields rose. The decline came as global markets reacted to growing uncertainty over the pace of the Federal Reserve’s interest rate cuts.
The US dollar hit a one-year high, making gold priced in other currencies more expensive for buyers, while rising Treasury yields hit their highest level since July.
This negative pressure is being seen on precious metals. Kyle Rhoda, financial markets analyst at Capital.com, noted that gold is being “pulled by the dollar and yields,” leading to a “mechanical drop” in the short term. Investors will be watching the Federal Reserve’s policy on interest rates carefully. Have been.
Although recent inflation data suggests the Fed may provide modest relief on rates next month, expectations of higher inflation next year have tempered expectations of lower rates.
New data for October showed a modest rise in US consumer prices, reflecting a slowdown in the process of reaching low inflation levels.
Yields and dollar strength
Gold is often seen as a hedge against inflation, but high interest rates make metals like gold less attractive. A rise in US Treasury yields, now above 4.40%, and a stronger dollar have dampened investor demand for gold.
Additionally, cryptocurrencies like Bitcoin, which recently reached $93,000 per coin. Which has attracted the attention of investors, causing more funds to move away from precious metals.
Disclaimer: This information is for informational purposes only and should not be construed as investment advice. It is recommended to consult a financial advisor before making investment decisions.