Prime Highlights:
MCX gold prices declined by ₹95,000 per 10 grams due to US-China trade talk and India-Pakistan ceasefire.
Gold at 9:05 AM on May 12 declined at ₹94,265 per 10 grams, declining by ₹2,253 or 2.33% from the last close.
Key Facts:
Decline in gold prices following mediocre demand for safe-haven assets amid declining geopolitical tensions.
Spot gold in the world fell 1.4% to $3,277.68 an ounce and US gold dropped 1.9% to $3,281.40.
Key Background:
This decline in gold price on Multi Commodity Exchange (MCX) today is due to two significant geopolitical events. One, a Chinese-US trade breakthrough on positive terms when the world’s two superpowers reached an “important consensus” that would stem America’s trade deficit. Such positive thinking in markets was thus due to funds exiting hedges such as gold for speculative corners.
Second, news of India and Pakistan restoring a ceasefire eased tensions throughout the subcontinent. That also removed some pressure from gold demand as a hedge that lowered its price fall.
On domestic market, gold opened lower at ₹95,500 per 10 grams from the previous day’s close level of ₹96,518. It fell to intra-day low of ₹94,265 per 10 grams at 9:05 AM. MCX silver prices fell by ₹578 or 0.60% to closing price to ₹96,151 per kg.
These gold price trends are a mirroring of overall direction of the spot gold reducing 1.4% to $3,277.68 per ounce and US gold futures reducing 1.9% to $3,281.40. These kinds of directions in investor mood against gold merely indicate greater belief in global economic stability in wake of the newest geopolitics headlines.
Investors and market participants ought to watch out for such geopolitical events since they indicate otherwise from in the precious metals commodity markets of gold and silver.
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