Gold Prices Continue To Come Down, 5% in 2018 so far

Gold price
Gold price

Gold prices fell to more than six-month lows as the dollar added to gains, denting demand for the yellow metal despite the increased risk of an escalating trade war as U.S. tariffs on Chinese imported goods are expected to come into effect later this week.

The recent downdraft in gold can be attributed to a strengthening dollar against its rivals over the past several weeks as the Federal Reserve continues its plan to raise benchmark interest rates (bullish for the greenback).

The dollar has been trading at 11-month highs and has appreciated over 7.5-8 percent from the lows of 2018.

The Federal Reserve raised interest rates for the second time this year and upgraded its forecast to four total increases in 2018 as unemployment falls and inflation overshoots their target faster than previously projected.

The European Central Bank too has outlined plans to end its easy-money policies joining the Federal Reserve in rolling back its quantitative easing initiatives.

Rising trade war concerns between the US and other major economies like China may limit a significant downside in the prices. However, we may witness increased volatility in the yellow metal.

 

Here are some important things about gold and silver prices today:

1. Gold slipped back towards its lowest in more than 6 months on Monday as the currencies of key consumers weakened, making it more expensive for them to buy dollar-priced bullion. In the international market, gold was trading around $1,249 an ounce.

2. In the national capital, gold of 99.9 per cent and 99.5 per cent purity declined by Rs. 20 each to Rs. 31,400 and Rs. 31,250 per ten grams, respectively.

3. The precious metal had lost Rs. 230 in the previous two sessions. Sovereign, however, remained steady at Rs. 24,800 per piece of eight grams.

4. Tracking gold, silver ready dropped further by Rs. 250 to Rs. 40,350 per kg and weekly-based delivery by Rs. 185 to Rs. 39,040 per kg.

5. On the other hand, silver coins, however, continued to be traded at previous level of Rs. 75,000 for buying and Rs. 76,000 for selling of 100 pieces.