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Gold slumps to Rs 74,390 and silver at Rs 89,280/kg amid weak global demand and strong dollar

Gold prices in India declined sharply from an all-time high price touched on October 23. Due to high demand ahead of the festive season, gold peaked at Rs 81,500 per 10 grams on Oct 23. Since then, prices have steadily dropped.

As of 6:55 a.m. on November 18, gold was trading at Rs 74,390 per 10 grams, according to India Bullion Association reports. This marks a significant decline of Rs 1,220 from November 11, bringing prices prices down to levels similar to those observed on September 20.

The sharp decline in November is attributed to a contraction in global demand, influenced by the US elections. Gold, an investment safe haven, has suffered from reduced demand with global investors moving into equities.

This trend is more pronounced in the foreign markets, where the price of gold has taken a major hit. The current price per ounce of gold is pegged at $2,580 according to the World Gold Council. Some of the key reasons include strong dollar prices and political certainty following the US elections as investors now start investing in riskier assets.

Accordingly, local market trends appear to follow the same pattern, with prices aligning with the global shift. The decline in Indian gold prices mirrors a larger international market slump that is catalysed by a decreased preference for safe-haven investments.

On the other hand, silver prices are also showing a downward trend with a slight decrease in prices. As of 6:55 a.m. on November 18, silver is at Rs 89,280 per kilogram. According to a report by NDTV Profit, the Multi Commodity Exchange (MCX) has predicted, that Silver price futures, due on December 5, are trading at Rs 88,505.

Ongoing shifts in the market for gold and silver mark changing dynamics in commodity investments. Both the yellow and white metals are suffering from pressure as investor sentiment flows away from safe-haven assets to riskier investments.