Thread by @BiIndia

#GoldPrices are falling and the world’s biggest market for the yellow metal is hoping for more shoppers

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By @pabsgill

@pabsgill #GoldPrices are finally falling after a year of being on the rise. And, people in the world’s biggest market for gold, India, are taking advantage of the opportunity.

#Gold

@pabsgill Benchmark gold futures in the country have dropped 20% from a record high in August last year of ₹56,200. They are basically a deal to trade gold at terms decided now but with a settlement date in the future.

#Gold #GoldPrices

@pabsgill Moreover, as compared to the beginning of 2021, gold prices are down by over ₹5,000 from highs of ₹48,500. This means the precious metal has technically entered bear territory.

#Gold #GoldPrices

@pabsgill “Gold prices fell for the third consecutive week as risk on sentiments kept investors away from precious metals,” said HDFC Securities in its report dated March 8.

#Gold #GoldPrices

@pabsgill For consumers, there couldn’t be better news with the summer wedding season just around the corner and #AkshayaTritiya — pegged as an auspicious day to buy gold — falling on May 14.

#Gold #GoldPrices

@pabsgill Why is the price of gold falling?

Simply put, consumers are no longer looking for a safe haven store of currency. During the coronavirus pandemic, the markets were volatile and rates offered by banks were sub par, giving gold the edge over others as a store of value.

#GoldPrice

@pabsgill Now that the number of #COVID19 cases are slowing down and the economy is on the track to recovery, gold prices are coming back down. Investors are instead putting money into US government gold yields to earn higher returns.

#Gold

@pabsgill “#GoldPrices declined on a stronger dollar as traders and investors switched to the best alternative to gold.” noted HDFC Securities. As a result, the dollar index rose by 1.2%.

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@pabsgill It’s time to buy up #Gold!

Last year may have been stellar to buy gold on the commodity exchange, but physical consumption was in the pits. According to the World Gold Council (WGC), the demand for jewellery plunged by 34% in 2020 as compared to the year before.

@pabsgill Now, the demand for physical gold is seeing an uptick as prices dip to a near one-year low. It also helps that the Modi administration reduced import duty on the yellow metal from 12.5% to 7.5%.

#Gold #GoldPrices

@pabsgill Lower prices, however, are only one part of the picture. In India, gold holds an important place in Indian weddings and the summer wedding season is set to occur between mid-April to May.

#Gold #GoldPrices