Gold is a safe-haven asset and any likely turmoil in the financial world or geo-political tensions renders the asset class safe with its rising valuations. However, when the economic indicators provide for an overall healthy outlook, gold tends to lower in value which pushes its price down.
Recently on account of a number of reasons, gold in the Indian market has inched lower in price terms. let us know all such likely reasons that are pushing prices of gold down.
1. Upbeat US Job employment data: The US private sector job data has been stupendous with creation of 138,000 jobs in the month of May and that provides room for a potential rate hike by the US Fed. With any likely rate hike news, gold ought to loose its sheen.
2. Substantial profit bookings in yellow metal on recent price hike: The prices have also fallen in the wake of recent large-scale profit bookings in the precious metal when it hit near five-week high. Price of the yellow metal in Delhi today is Rs. 28,000 which was in the early trading day was reportedly Rs. 28,200.
3. Strong Dollar: On the back of good job data, US dollar firmed in value, the US dollar was strong and hit a week high in the early trading hours of Friday against yen.
4. Higher Probability of Interest Rate Hike by the US in Fed Meet slated for June 13-June 14: Beginning June, US government has put forth strong signals to bring about a interest rate hike this month amid weak inflation figures. Also, the government is keen to begin with the shedding of its bond holdings amounting to $4.5 trillion.
5. Lower demand from local jewelers in the Spot market: Traders have cited lower demand in the spot market from jewelers end as one of the major reasons dragging the yellow metal down in price terms.