Tag Archives: Gold Price

Falling Gold Price May Affect The Banks Adversely

 The falling price of the precious yellow metal is likely to cause a mixed impression upon the masses. The survey, made immediately after the gold price hit its lowest recently, reveals mixed opinions from the renowned jewelers from across the country. As per the well-known gold jewelers, the lowest price of gold may encourage the smaller of mediocre jewelers to deposit more gold with them that they can use further when the prices would go up once again.


The situation is favorable for the people as well who are largely interested in making money through investment in gold. However, the jewelers are supposed to be the most benefited people in this situation where gold is losing its price in the International market.

As a matter of fact the cost of the rented gold is open-ended where the cost is fixed while the jewelers sell them to their customers either in the form of jewelries or in the form of gold bar. This reduces the inventory risk for the jewelers as well. This lowered risk also works as a cushion against any situation caused by the reduction of the price. As the demand of gold jewelry is likely to raise in the time to come, so the interest of the banks is likely to go down further as well.

In such a situation, the banks would have to take the policy of ‘wait and watch’. The banks that are nominated by the Reserve bank of India (RBI) would be in a situation to take the commodity risk to face the loss. At the present moment, when the price of gold is going down, the market would not be in favor of the banks. However, the situation would certainly improve and then the banks would play a vital role again.



Gold Price Hits Its Lowest In Last 2 Years

Due to the frequent ups and downs in the global gold markets and changes in the international exchange rates, gold price hits its lowest in last 19 months. The effects of this price reduction have caused a favorable condition among the potential gold buyers. The reduction in the price continued to slow down for a few days but it gained some strength late last night with a slight gain.

gold bar

Multi Commodity Exchange (MCX)

This MCX has been a crucial factor for this market situation. The MCX indicator ended a down of 112 rupees and it closed at 25,654 rupees for every 10 gram. The same indicator hit its lowest at 25,435 rupees previously and it was the lowest in the last 19 months. This precious yellow metal was also influenced by the US market where the MCX recorded a low of 0.37% and the price ended at $1.382.2 for every ounce.

The Possible Upcoming Boost:

The bullion market experts, however, are not very much sure about the future price of gold. The experts feel that the prices are likely to go up once again after Akshaya Tritiya, a festival dedicated to gold purchasing. However, they are of one opinion that this is the best time for the potential buyers to make a good purchase of this metal, as the prices are likely to go up again sooner or later.

India has been putting its best efforts to adopt suitable policies to increase its gold assets. The announcement of P. Chidambaram, the Finance Minister of India, has a favorable impact on this market situation. The experts have firm faith in the role played by the minister.