Will gold prices decrease or increase?

 Will gold prices decrease or increase?




A common question arises in the minds of a rational buyer while planning to invest in the yellow metal. The question could relate to the increase or decrease in the gold prices that affect the buying behavior of a rational investor or consumer.

The market is difficult to estimate but with proper research and analysis, the market fluctuations can be estimated. The prices of gold are majorly affected by the demand and supply in the market. The demand for gold occurs amongst the consumer and the investor when the actual return on the equity and the bonds decreases. In that situation, the investor focuses on investing in gold. This increases the prices of the yellow metal.

"According to research by the world gold council, approximately 4400 tomes of gold were demanded in the year 2019. Amongst the global demand for gold India has the largest percentage share".

The current and future situations of the gold prices.

Due to the increase in the national and international interest rates a major impact occurred on gold prices. In the national market and international markets, the gold prices are at their lowest in 5 and 15 months. According to the market experts, this decrease in gold prices will continue for the next 3-6 months.

Due to the decrease in the prices of gold in the international market, a significant decrease in the national market has also been observed. The gold prices on 7 August 2020 were recorded as 56,126 rupees for 10 grams of gold, but on 22 July 2022 gold prices were observed as rupees 49,970. This indicates that the international market is having a major impact on national gold prices.

Reasons for the decrease in gold prices.

The market in the current situation is estimating a significant decrease in gold prices. The reasons for the decrease in gold prices were observed as:-

  • There has been a 1.5% increase in the interest rates in the American market. This has resulted in a decrease in the gold prices in the domestic market.
  • European Central Bank has increased its interest rates by 0.5%.
  • Due to the increase in the dearness in many countries the demand for gold has decreased resulting in a decrease in the prices of gold.
  • The European Union has restricted the supply of gold in Russia increasing the supply in the other countries that have provided a major impact in reducing the prices.

After analyzing different facts and statistics exports reviewed that the increase in the gold prices is more likely to decrease in the future due to the strengthening of the dollar. On the other aspect, the domestic market is likely to decrease in terms of gold prices for the next 3 months.

Based on the analysis and the market research the gold prices are likely to stay stable with little decrease in the next quarter. This could provide a very big opportunity for the investor and commercial buyer to purchase the gold. During the festive season, the old price is likely to increase in the month of October-November in the Indian market. So this duration could be best for investing in gold for commercial purposes as well as for investment purposes.

Thank you for reading till the end.

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