A mixed trend was seen in the prices of gold and silver on Monday as the ongoing tension in West Asia entered its third week. The price of silver fell by Rs 4000 to Rs 2.55 lakh per kg. Whereas the price of gold fell by Rs 1450 to Rs 1.57 lakh per 10 grams.
Price of gold and silver in international market
Spot gold fell by more than one percent in early Asian trade and slipped below the $5,000 level. During trading, gold reached an intraday low of $ 4,971.30. At the same time, spot silver also fell by 2.23 percent to $ 79.5 an ounce.
What is the reason for the decline?
This pressure in precious metals is being seen at a time when the rise in energy prices due to the West Asia conflict and concerns about inflation have affected the trend of the global market. Due to the fear of rising inflation, the expectation that the US Federal Reserve and other major central banks will soon start cutting interest rates has weakened. In fact, there was a sharp rise in the prices of crude oil after the attacks carried out by the US targeting Iran’s major oil export hub. In response, Tehran launched retaliatory attacks on the energy infrastructure of many Arab countries, which further increased uncertainty in the market. There is also no clarity about how long the war will last. For this reason, it is becoming difficult to assess its impact on the financial markets and the broader economy. According to a Bloomberg report, an aide of Donald Trump has indicated that this conflict could drag on for four to six weeks. However, mixed signals are being received from both sides. Trump said Iran is interested in a deal, but the US wants better terms. On the other hand, Tehran has said that it has neither requested any talks nor demanded a ceasefire. Meanwhile, expectations regarding interest rate cuts have further weakened. U.S. consumer spending data released Friday showed only a modest gain in January, indicating sluggish economic growth even before the war began. At the same time, due to rising prices of petrol, American consumer sentiment also fell to a three-month low.
