Gold Prices Slip Below $2000/oz; Indian Jewellers Not Buying Back Gold For Cash

Gold prices which in the spot market on the previous day scaled to highs of $2070 levels have come down sharply in just 1-day to below $2000 per oz level. Last gold in the spot market at 1993.7/oz, down close to 3%. In the futures market gold April contract traded at a discount of over 2% at $1999 per ounce.

Gold rates and its volatile nature

Though the volatility shall continue to persist with upswings and downswings, the case for today's sharp fall is on account of news flow around reaching a peace like situation in Eastern Europe. Also recovery in the equities markets world over also triggered a loss in safe haven assets such as gold. Notably, German DAX jumped by over 6% intra-day. Further at the time of writing this report, US benchmarks traded with gains to the tune of over 2%, once again giving a fillip to risk-on sentiment.

Gold prices being revised by global investment banks

After Goldman's Sachs bullish forecast for gold, Citi has also revised its outlook on gold.

The bank said, "We upgraded the 0-3m gold point-price target $125/oz to $1,950/oz but remain bearish spot/forwards with a 6-12m downside target of $1,750."
The team went on to say "Even though gold trading tends to weaken into Fed lift-off, we think geopolitical tensions and elevated asset market volatility can support the yellow metal in the short-term."

Over the medium-term, higher real yields and stronger equities can weigh on bullion prices again, while risk premiums should erode. But robust physical demand in Asia and recession tail hedges might mute the extent of price downside in 2022."

 

Gold prices in retail market in India too came crashing down on March 9, 2022

After gaining by as much as Rs. 1400/10 gm intra-day, gains dropped to just Rs. 400-440 per day, which at one time of the day led gold prices in even small cities  to scale close to Rs. 56,000 per 10 gm for 24K gold. Further as per stakeholders, either there are no sellers and buyers at such high price or jewellers, if one comes to sell gold, are claiming that they would not pay the financial consideration of the same in cash, but that gold can be exchanged for gold as in jewellery or the like.

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