Stories
Gold Plummets by ₹3500 Before Diwali-Dussehra: What's Driving the Price Drop?
- •Gold prices have fallen sharply, with 24-carat gold dropping by up to ₹3,500 per 10 grams and 22-carat by ₹3,200 in a week, just before the festive season.
- •Silver prices also saw a significant drop of ₹5,000 per kilogram due to a slowdown in industrial demand.
- •The primary reason for the pressure on precious metals is the upcoming US Federal Reserve monetary policy meeting on October 28.
- •Uncertainty surrounding interest rates has led large institutional investors to cautious profit-booking in gold.
- •The probability of a US interest rate hike has decreased from 70% to 22% after lower-than-expected inflation figures, potentially easing pressure on gold prices if rates remain stable.
Key Questions Answered
Precious metals are under heavy pressure due to institutional investors engaging in profit-booking and caution ahead of the US Federal Reserve's monetary policy meeting scheduled for October 28. Additionally, a slowdown in industrial demand on October 1 led to a sharp drop in silver prices.
Over the course of the week, 24-carat gold became cheaper by up to ₹3,500 per 10 grams, while 22-carat ornamental gold dropped significantly by ₹3,200. Furthermore, silver prices saw a sharp decrease of ₹5,000 per kilogram due to sluggish industrial demand.
The probability of an interest rate hike dropped from around 70% to 22% after lower-than-expected US inflation figures. Analysts believe that if the Federal Reserve decides to keep interest rates stable at current levels, the existing pressure on gold prices could ease.
