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Kolkata: The cost of 10 gms of gold of the 999 variety stood at Rs 1,00,502 on July 23. On the same day, the rate of gold 995 variety was Rs 1,00,100. This represented the peak of the god prices of both the 999 and 995 variety. The prices came down by 1.75% in each instance and stood at Rs 98,735 and Rs 98,340 for the two types respectively on July 25. In the Multi Commodity Exchange too, futures for October delivery prices dipped from Rs 1,01,543 to Rs 98,764. Experts are of the opinion that the price of the yellow metal are likely to be in the consolidation phase this week.
The triggers are a host of factors particularly those in the run-up to the August 1 deadline of Trump's retaliatory trade tariffs and the meeting of the rate-setting Federal Open Market Committee of the US Fed. Significant macro economic data such as US job market statistics, inflation, consumption levels which will indicate the rate-setting body's decision of the world's largest econ0omy will also be closely watched by the market.
Incidentally, a lot depends on the policy rates set by the US central bank. If the rates go down -- which US president Donald Trump keenly wants -- it will signal weakness for the US Dollar, which is expected to channelise the flow of money to emerging markets for better returns and the Indian stock markets could gain from this flow. If the equity markets rise, money will chase that market and gold rates could experience a downward pressure.
August 1 is also supposed to signal the end of the suspension period of US trade-related tariffs. It will also end for India. Analysts pointed out that the gold market will wait for the outcomes of both the US Fed and the White House announcements on trade tariffs before deciding the next step.
Gold prices fell on the global stage too, thanks to the lack of fireworks on the trade relations of the US and China centering the tariffs. According to reports, Comex gold futures for August delivery declined $37.90/ounce (or 1.12%) to settle at $3,335.60/ounce in New York. The tariff truce between the two of the world's biggest economies also lifted spirits in the US equity markets, which signaled a temporary end to the safe-haven demand for the precious metal.
Significantly, the relentless northward march of gold prices in more than a year was substantially due to central banks buying a lot of gold and geo-political tension in West Asia and Russia-Ukraine front. Central banks around the world are expected to buy more gold this year but not now at, said analysts.
By the way, gold 999 represents the highest for of purity of gold (commonly referred to as 24 carat). Gold 995 is the variety with which jewellery is usually made.
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