Gold and Silver Prices Drop Amid Strong Dollar and Trump's Election Impact

Highlights

Gold and silver prices have fallen slightly due to decreased demand and a stronger dollar, with expectations of further corrections.

Today's Trade Department: Gold and silver prices have decreased slightly due to a reduction in both international and domestic demand. On Wednesday, the price of gold fell by $75 to $2,660 per ounce (31.10 grams) in the international market.

As a result, the price of 10-gram Melimi (999 purity) gold in the Hyderabad bullion market dropped below Rs. 80,000, settling at Rs. 79,100. The price of silver per kilogram also decreased to Rs. 92,700.

Price Correction Expected:

It is important to note that gold and silver prices reached all-time highs in October.

On October 30, crude oil also touched a high of $2,801 per ounce. In this context, the domestic price of 10 grams of Melimi gold reached a record high of Rs. 82,000.

The price of silver per kilogram crossed Rs. 1.02 lakh.According to bullion associations, domestic sales of these metals have fallen significantly as a result.

Even during Dhanteras, which precedes Diwali, gold sales are expected to be down by 15% compared to last year. Bullion societies also report an increase in people exchanging old jewelry for new pieces.

Currently, gold and silver are seeing a correction in the international market as well.

Central banks have also halted their gold purchases at these high prices.

With expectations that the US Federal Reserve may reduce interest rates by 0.25% in its upcoming review, demand for the dollar has increased, which has led to decreased demand for bullion.

Impact of Trump's Election:

In October, the dollar index gained 3%. As a result, there are signs that investments are shifting.

The dollar is expected to strengthen further if Donald Trump is re-elected as president. ICICI Securities predicts that crude oil prices may fluctuate due to tensions in West Asia, and the price of gold per ounce could drop to around $2,600.

Strong Dollar and Its Impact on Domestic Prices:

The dollar touched an all-time high of Rs. 84.30. Since India is entirely dependent on imports for its gold, it must purchase gold internationally in dollars.

As a result, even if gold prices in other countries have fallen, domestic buyers are not benefitting as much due to the strength of the dollar.