The prices of Gold fell on Wednesday in India, according to data from the Indian Multi Commodity Exchange (MCX).
The price of gold stood at INR 63,078 per 10 grams, INR 230 lower than INR 63,308 on Tuesday.
Regarding futures contracts, Gold prices fell to INR 63,126 per 10 grams from INR 63,257 per 10 grams.
Silver futures contract prices fell to INR 73,589 per kg from INR 74,095 per kg.
| India Major Pairs | Gold Prices |
|---|---|
| Ahmedabad | 65,295 |
| Bombay | 65,150 |
| New Delhi | 65,160 |
| Chennai | 65,290 |
| Calcutta | 65,525 |
Global Market Movements: Comex Gold Price Remains Weak Amid Rising US Treasury Yields
- A combination of supporting factors helps the Comex Gold price regain positive traction on Wednesday and snap a three-day losing streak.
- Bets that the Federal Reserve will cut interest rates in March turn out to be a key factor lending support to the non-yielding yellow metal.
- The possibility of a new escalation of the conflict in the Red Sea, coupled with China's economic woes, also acts as a tailwind for the safe-haven metal.
- The official Chinese PMI released over the weekend indicated a further deterioration in manufacturing activity and little sign of recovery by the end of 2023.
- A private survey showed on Tuesday that Chinese factory activity expanded at a faster pace in December, but business confidence for 2024 remained subdued.
- The dollar consolidates last night's strong gains and hits a more than one-week high, helped by a sharp rise in US bond yields, and caps commodities.
- Additionally, investors prefer to stay on the sidelines pending US Manufacturing PMI data, JOLTS job openings and FOMC meeting minutes.
Frequently asked questions about Gold
Why invest in Gold?
Gold has played a fundamental role in human history, as it has been widely used as a store of value and medium of exchange. Today, aside from its brilliance and use for jewelry, the precious metal is considered a safe-haven asset, meaning it is considered a good investment in turbulent times. Gold is also considered a hedge against inflation and currency depreciation, since it does not depend on any specific issuer or government.
Who buys more Gold?
Central banks are the largest holders of Gold. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and purchase Gold to improve the perception of strength of the economy and currency. High Gold reserves can be a source of confidence for the solvency of a country. Central banks added 1,136 tons of gold worth about $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the largest annual purchase since records exist. Central banks in emerging economies such as China, India and Turkey are rapidly increasing their gold reserves.
What correlation does Gold have with other assets?
Gold has an inverse correlation with the US Dollar and US Treasuries, which are the main reserve and safe haven assets. When the Dollar depreciates, the price of Gold tends to rise, allowing investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken the price of Gold, while sell-offs in riskier markets tend to favor the precious metal.
What does the price of Gold depend on?
The price of Gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of Gold to rise rapidly due to its status as a safe haven asset. As a non-yielding asset, the price of Gold tends to rise when interest rates fall, while rising money prices tend to weigh down the yellow metal. Still, most of the moves depend on how the US Dollar (USD) performs, as the asset is traded in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold in check, while a weaker Dollar is likely to push up Gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
