Continuing its upward trend in the international market for the seventh consecutive day, the price of gold in local markets in Ahmedabad soared to a new record high on Friday, reaching Rs 67,500 per 10g. This surge is primarily attributed to the weakening of the US dollar, fueled by expectations of an interest rate cut by the US Federal Reserve in June.
Central banks increasing their procurement of gold has also contributed to the spike in prices. In just one day, the price of gold shot up by Rs 900, from Rs 66,600 per 10g on Thursday. Geopolitical factors such as economic concerns in China, a softer global equity market tone, and speculations about military tensions in the Middle East are among the driving forces behind the rising price of gold.
Haresh Acharya, director of the India Bullion and Jewellers’ Association (IBJA), mentioned that despite officials downplaying speculations regarding drastic policy changes by the Federal Reserve, gold prices continue to climb. He also predicted that the international price of gold could reach $2,200 in the near future.
However, despite the high prices, gold imports saw a significant increase in February, reaching a six-month high of 13.9 metric tonnes. Analysts are cautious about a possible sell-off by investors with such high prices.
On the contrary, silver prices have remained relatively stable, hovering around Rs 74,000 per kg. It is important for investors to closely monitor these market trends and consider diversifying their portfolios to mitigate risks associated with fluctuating gold prices. The increasing demand for gold, both from central banks and investors, could indicate a continued bullish trend in the precious metals market.
