On the previous trading days – Thursday (June 17) and Friday (June 18), gold futures on the Multi Commodity Exchange (MCX) plummeted by almost Rs 2000 per 10 gram (June 18). On the MCX, 10-gram gold is now priced at Rs 46,800.
The fundamental cause of the downturn in the US Federal Reserve’s recent announcement that an interest rate hike is on the books for the country’s central bank. The country’s negative consumer mood, as well as the US Dollar’s increase against other currencies, are also weighing on gold prices.
The US Federal Reserve’s announcement to raise interest rates twice in 2023, as well as the US Dollar’s (USD) strengthening versus other global currencies, are causing a weakening in the yellow metal price, according to commodity specialists.
They did say, however, that the precious metals price drop is just transitory and that gold investors should take advantage of the current price drop. The bullion gurus went on to say that after the trend reversal, gold prices will quickly return and rise to ₹48,500 per 10 gram in one month.
According to Amit Sajeja of Motilal Oswal, gold investors should view the recent drop in gold prices as an investment opportunity, noting, “Gold is currently trading at ₹46,500 per 10 gm on the MCX, while the yellow metal is trading at $1750 per ounce in the international market. The gold price is projected to form a new bottom in the next three to four days, therefore investors should wait.”
NS Ramaswamy, Head of Commodities at Ventura Securities Ltd, expects gold to rise to ₹45,500 per 10 gm at the MCX in the current market.
This is the worst crash in 2021. If you’re looking to buy gold, you should act fast because analysts believe the price drop is only temporary and that the yellow metal will regain its shine soon.
