In the last year (2020), when gold had gone above 56,000 per ten grams in the Indian market, it was being speculated that its prices would increase further. At that time it seemed that the corona infection would be difficult to control and its prices of gold would increase further. But the corona infection vaccine has changed all the equations. Now gold has fallen in the Indian market and is touching and is being sold at Rs 44,000. It is being said that the gold price can decline more.
Speed of vaccination and bond yield reduced gold price
In fact, after the rapid pace of corona vaccination, the price of gold has come down significantly after the pace of economic activity around the world. The second big reason is the increase in US bond yield. Investors around the world invest heavily in American bonds. Big investors are investing in gold to make bond yields attractive. Therefore, investment in gold has decreased in the international market and this is also a big reason for its prices to come down. Apart from this, the power of the dollar has also reduced the demand for gold. Because it is expensive for other currency holders to buy gold in dollars.
Gold price to fall more
As far as India is concerned, the international market has had an impact on it. Also, it has become cheaper due to reduced duty on gold and silver in India. According to PR Somasundaram, managing director of World Gold Council India, the holding of Gold ETFs decreased by more than two per cent in February due to rising bond yields and falling gold prices. During this period, the holding of Global Gold ETFs has declined by 84.7 tonnes. According to him, this is the seventh-largest monthly decline in history so far. The holding of SPDR Gold Trust, the world’s largest gold-based exchange-traded fund, reached its highest level of 1,278.82 on September 21, 2020. But by 4 March 2021, it declined by 200.5 tonnes or 15 per cent. It is clear that the price of gold will fall more.