Gold price fall on easing US-China trade worries
Gold Price Fall: After China-US Tariff Truce: Gold, which was recently at an all-time high of Rs 1 lakh per 10 grams, has now slipped below Rs 92,000. On May 16, June gold contracts on MCX recorded a decline of more than 1 percent. It is believed that the biggest reason for the fall in gold prices is the reduction in trade tension between America and China.
Both countries have reduced the tariffs imposed on each other’s goods for 90 days under a mutual agreement. Due to this, investors have turned away from safe investments, i.e., gold, and turned towards risky assets.
On the other hand, the dollar index is now strengthening for the fourth consecutive week, which is making gold more expensive for holders of other currencies. As a result, the demand for gold has decreased. This has also been a reason for the decline in the price of gold in the international market. The price of spot gold has fallen to $ 3,210.19 per ounce in the US market, indicating a decline of about 3 percent this week. This is said to be the biggest weekly decline since November 2024.
The US Federal Reserve policy did not provide relief
Experts say that there are no signs of a reduction in interest rates from the US Fed, which has reduced enthusiasm in the bullion market (buying gold). When interest rates do not fall, the attractiveness of gold decreases because it increases the carry cost.
What should investors do?
In dollar terms, the price of gold is facing support at $2,940 and resistance at $3,320. Investors will have to pay attention to the movement between these. If you are a long-term investor, then this decline can be seen as an opportunity, but short-term traders should remain cautious for now. Uncertainty remains in the market, and the coming few days can be decisive for trend reversal.
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