Gold prices are now dropping at their all-time fastest rate. Which is actually great news for the consumers. The recent past of gold prices indicates that once the gold rate used to be 1 lakh taka along with GST. Though the market experts have said that the price may touch 85 thousand taka very soon. There could be a huge drop in gold prices.
How much is the current gold price
The record breaking price of 10 grams was recently 1 lakh taka, but now it has dropped below 92,000 taka. On May 16, MCX's gold contracts dropped by over 1 percent. It is assumed that the largest factor behind the decline in gold prices is the deceleration in trade tensions between China and the US. Actually, both nations have lowered the tariffs on each other's commodities for 90 days through a mutual understanding. Therefore, investors are diverting from safe investments i.e. gold and are investing in the stock market or other commodities.
Strong dollar has also lowered the price of gold
The dollar index is currently rising for the fourth straight week, which is making gold costly than other currencies. Consequently, its demand is going down. That is why the price of gold has also dropped in the global market. Discussing spot gold, it dropped to $ 3,210.19 per ounce in the US market, which indicates a decrease of around 3 percent this week. This is the largest weekly fall since November 2024.
US Federal Reserve policy has not provided respite
There is no indication of a cut in interest rates by the US Fed, which has decreased the gold buying incentive in the gold market. Gold becomes unattractive when interest rates fail to decline as it raises its carrying costs. What does the technical chart indicate?
According to The Mint report, gold is currently below the 50-day moving average. Which has been supported continuously since November 2024. A greater decline is possible if this technical support is breached. According to the same report, analysts stated that $ 3,136 is a critical level for the prices of gold. If this level is breached, the decline can extend to $ 2,875-2,950 per ounce.
According to some experts, if gold stays below 94,000, the weakness will persist. If gold goes past 89,500, then the next strong technical support will be 85,000.
What are the recommendations for investors?
On a dollar basis, gold price is being supported at $2,940 and resisted at $3,320. We should keep an eye on this movement between the two. If you are long-term investor, then this fall can be used as an opportunity. Short-term traders must be careful for now. There is speculation in the market and the trend could reverse over the next few days.
