By Admin 
Gold and Silver: Gold prices usually rise in times of global uncertainty and war, but the fall in prices last Monday surprised investors. On the first trading day of the week, the prices of both gold and silver slipped on the Multi Commodity Exchange (MCX). Yesterday the price of gold fell by Rs 2690-2900 per 10 grams. On MCX too, gold was seen falling 1.83 percent and trading at the level of Rs 1,55,566.
An even bigger decline was seen in silver as compared to gold. Yesterday, there was a big fall in the price of silver by Rs 4232-5000 per kg. On this day, silver was seen trading in the range of Rs 2.53-2.55 lakh per kg with a decline of about 2.11 percent. It is clear from this that both gold and silver started at lower levels and there is a possibility of pressure on them throughout this trading session.
Gold becomes cheaper in war environment
Generally, in times of geopolitical tension, the price of precious metals like gold and silver increases because their demand as ‘safe-haven assets’ increases. In such a situation, the reduced price of gold and silver amid the war between Iran and America is really surprising.
According to Gaurav Garg, Research Analyst at Lemonn Markets Desk, global factors play an important role in the current price fluctuations. He says that this fall in prices is mainly related to the rising prices of crude oil. He says, “The main reason for the fall in the prices of precious metals is the rising prices of crude oil. Crude oil prices rose to $ 100.15 per barrel, increasing fears of inflation and weakening expectations of a cut in interest rates by the US Federal Reserve.
Why did the price of gold suddenly fall?
In fact, due to increase in crude oil prices, the fear of inflation increases across the world because due to this, the cost of everything from transportation to logistics, farming and raw materials increases. To keep this inflation under control, the US Federal Reserve keeps interest rates high. This reduces the flow of money in the market because taking a loan from the bank becomes expensive due to increase in interest rates. In such a situation, people reduce purchases or investments. When there are less buyers in the market, demand will automatically reduce. Due to reduced demand, shopkeepers will be forced to reduce or keep prices stable. With this, the effect of inflation will gradually reduce.
Whenever the Federal Reserve keeps interest rates high, the US dollar strengthens. Since gold is bought in dollars only in the international markets, due to the dollar becoming expensive, the demand for gold reduces, due to which the prices start falling.
This is also a reason
Apart from this, whenever the price of crude oil suddenly increases, the atmosphere in the stock market and commodity markets becomes disturbed. Investors raise cash by selling gold to cover their other losses or to meet ‘margin calls’. This was also a major reason for the fall in prices yesterday.
What should investors do?
Market experts say that investors should avoid taking any decision out of panic in such volatile times. Short-term price declines in commodities are common, especially when global economic signals are mixed. This is a right opportunity for those investing in the long term.
Such a fall in prices can provide opportunities for gradual buying, which can lead to profits in the future because experts are expecting the price of gold to reach record high again by Diwali this year.
However, analysts also suggest not to invest all the money at once. For example, if you want to invest Rs 1 lakh, then invest only Rs 25000 now. If prices fall, invest a little more money. In this way it is better to invest in small amounts. Experts also advise investors to keep an eye on crude oil prices, inflation trends and interest rates of the US Federal Reserve as they have a great impact on the prices of gold and silver.
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