The drop is linked to weak global economic indicators that have impacted investor sentiment.
Despite today’s fall, gold prices have been on an upward trajectory recently.
This shows an inherent volatility in the market driven by global economic conditions and changing investor expectations.
Colin Shah, Managing Director of Kama Jewelry, said: “Gold prices
Gold saw a boost following the release of US employment data last Friday. The data revealed a lower-than-expected job growth rate of 4.2%, which has raised the likelihood of a rate cut by the US Federal Reserve. If the Fed cuts rates, it could trigger a rally in gold prices as investors look for safer assets. In India, the festive season is expected to support gold demand, mitigating any adverse impact from the current higher gold prices.
Looking ahead, Renisha Chainani, Head of Research at Augmont – Gold For All, noted that the market is anticipating a major decision from the Federal Reserve on September 18.
“Currently, there is a 70% chance that the Fed will cut rates by 25 basis points, and a 30% chance that it will do so by 50 basis points. This upcoming decision is critical. If gold prices continue to decline, it could represent a valuable buying opportunity at the support level of $2,470 per ounce (roughly Rs 71,000 per 10 grams).”
For investors, the recent drop in gold prices could be an opportune time to buy, experts say.
With the Federal Reserve’s rate decision and strong domestic demand in India, boosted by the festive season, gold prices could rebound.
Monitoring global economic indicators and central bank decisions will be crucial to making informed investment decisions.
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