Gold Price Forecast: Gold and silver prices fell sharply on Monday. On the Multi Commodity Exchange (MCX), the price of gold dropped by Rs 1600 on the occasion of Chhath Puja. Silver prices also fell on MCX on Monday. Silver with December 5 expiry on October 27 fell by Rs 4,560, or 3 per cent, to Rs 1,42,910 per kg in early trade, down by Rs 1,400 from the previous close. Gold prices are likely to fall further in the coming days.
Will gold prices fall further?
Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial Services Limited, said gold prices are likely to fall in the coming days. The last few months have seen a huge rise in the price of gold. Gold eased after posting its biggest weekly gain in five years last week. Meanwhile, silver prices also fell more than 5 percent in a single session amid investors’ profit-taking after a huge rally earlier in the year. Now the question arises as to why gold prices are falling suddenly.
Why did the gold prices fall suddenly?
Most notably, geopolitical tension has eased somewhat amid the prospect of Russia-Ukraine and Israel-Hamas cease-fires. Apart from this, investors’ anxiety has eased with expectations of a trade deal between the US and China.
“We’re going to make a good deal with China,” US President Donald Trump said at the ASEAN summit in Malaysia on Sunday. He will also meet Chinese President Xi Jinping this week. On the one hand, tensions between America and China are slowly decreasing.
On the other hand, profit-taking is now taking place with gold hitting a record high of $4,400 an ounce on the COMEX and silver rising more than 85 percent. Along with this, margin calls, panic over a strong dollar index triggered a sharp sell-off in the market.
Speaking to Business Today, Navneet Damani, Commodity Researcher, Motilal Oswal Financial Services Ltd, said prices may now fall by another 5-6 per cent. That means gold prices are likely to fall by another 6000-7000 rupees.
