New Delhi [India], May 24 (ANI): Prices of gold and silver, both considered safe investment bets, have seen a mild correction this week after the latest stellar bull run.
These declines of late are partly due to profit booking by investors, a relative weakness in the USD index (which is directly proportional to their prices), and an indication from the US central bank that it would reduce key interest rates later than was earlier expected.
Gold has been in demand for a considerable period, with its prices rallying to hit record highs now and then. Geopolitical conflict in West Asia that stretched for a long time, buying by several central banks including RBI, and physical demand, have altogether pushed gold prices northwards.
Gold, and also silver, are scarce commodities, and any mismatch in demand-supply conditions may invariably trigger a sharp price rise.
According to the India Bullion and Jewellers Association (IBJA), the yellow metal this Tuesday traded at its all-time high at Rs 74,222 per 10 grams for the fine gold (999) quality. On Friday, it traded at Rs 71,950, marking a little over Rs 2,000 decline.
Benefiting from strong sales, organised gold jewellery retailers are set to clock 17-19 per cent revenue growth in the current financial year 2024-25, according to Crisil.
Similarly, for silver, prices declined nearly Rs 4,000 during this to a little over Rs 91,000.
At the global level, gold prices too are at their peaks. They, however, inched marginally down this, after hovering near a record peak, as recent economic data boosted bets that the US Federal Reserve would start cutting interest rates sometime later this year.
At the time of filing this report, gold June futures contracts were at USD 2,340.5 per ounce. Gold prices though remain about 15 per cent higher so far this year.
Healthy investment, persistent buying by central banks, and higher demand from Asian buyers helped drive the gold price to a record quarterly average of USD 2,070 per ounce, 10 per cent higher year-on-year and 5 per cent higher quarter-on-quarter, the World Gold Council had recently said.
The year 2024 is likely to produce a much stronger return for gold than the World Gold Council anticipated at the beginning of the year.
Historically, gold, as an asset, is considered to be a haven as it typically manages to retain or appreciate its underlying value in times of turbulence.
Manoj Jain, who heads Prithvi Finmart based in Indore, said global gold prices in the near term are seen at USD 2,500 and USD 2,600 by the year-end. For the India market, he sees gold at Rs 76,000 in the near term and at Rs 80,000 by the year-end.
He said demand from both China’s central bank and retail buying are supporting gold prices.
“All fundamentals are strong for buying,” he asserted.
For silver, he, in particular, said, strong industrial demand for silver, with demand outpacing supply, propped its prices higher.
According to Vikram Kasat, Head – Advisory, Prabhudas Lilladher, silver prices rose “due to forecasts of supply shortages and a rise in industrial demand, which is projected to increase by 9-11 per cent.” (ANI)
This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content.