Two enemies ready to embrace each other, gold prices are in trouble, gold prices drop by Rs 4,000 in 4 days
On Friday, gold prices fell by more than Rs 1000. In the last two days too, there was a lot of selling in gold. Gold on MCX has so far registered a decline of more than Rs 4,150 from its high. After touching almost one lakh, there has been a decline of more than 4 percent. Investors are facing a very strange situation. Because until they had not invested in gold, it was increasing and those who invested are regretting due to the decline. However, experts believe that gold is gold, one can sleep peacefully by investing in it. Especially considering the current geo-political conditions.
In fact, one of the reasons behind the rise in gold was America’s tariff conspiracy. When US President Donald Trump imposed tariffs on many countries, some countries also imposed counter tariffs in return. During this time, gold prices rose significantly. Later, Trump gave 90 days’ time to all the countries except China. During this time, those who reach an agreement with America will survive, and the countries that fail to do so will be subjected to the same tariffs that Trump had announced.
The tariff war between the world’s two largest economies (America and China) has reached a different level. There was a decline in the stock markets around the world and a lot of investment started coming in gold. Even the central banks around the world started buying gold. Due to this, the price of gold increased by 14 percent from April 8 to its high. That means more than Rs 12,000.
So why are the prices falling now?
Both America and China have softened their tone. It is being said from the American side that there will not be such heavy tariffs on China. On the other hand, China has also softened its tone after this and said that things can be sorted out with America. Now the news of a reconciliation between the two countries at some level has worked like pouring cold water on the boiling of gold.
According to a Reuters report, China is considering exempting some US goods from its tariffs. This move has dealt a blow to gold’s safe-haven image. By 6:36 am (GMT) on Friday, spot gold fell 1.4 percent to $3,302.81 an ounce. At the same time, US gold futures fell 1.1 percent to $3,312.80.
China is considering exempting some US goods that come under a 125 percent tariff and is asking companies to tell which goods can be included in it. This is the biggest indication so far that Beijing is worried about the economic impact of the trade war. On the other hand, US President Donald Trump said that trade talks with China are ongoing, although China has said that there is no discussion about tariffs.
What do market experts say
IG Market Strategist Yep Jun Rong said, “Partial exemption in tariffs can be seen as a step towards easing US-China tensions, which puts some pressure on safe-haven assets like gold.”
A Moneycontrol report quoted Rajiv Popley of Popley Group as saying that gold prices are fluctuating. Only 1 week is left for Akshaya Tritiya. Demand for gold is expected to increase on Akshaya Tritiya.
Big groups of the world such as JP Morgan and Goldman Sachs are seeing a bright future for gold in the coming times. JP Morgan feels that the average price of gold can be $ 3675 per ounce by the end of 2025. At the same time, due to strong demand and purchases by global central banks, gold can soon reach $ 4000. Goldman Sachs believes that gold can reach $3700 per ounce in 2025 and will reach $4500 by next year i.e. 2026. $4500 per ounce means that 10 grams of gold will cost about Rs 1.5 lakh.
