What is the Reason for Gold Rate Falls? What do the Experts Say?

Gold prices have unexpectedly dropped after showing signs of reaching record highs. The price fell by almost one per cent, attributed to a rebound in the dollar and bond yields following strong US trade activity data. This sudden drop in gold prices has occurred despite the expectations of a rate cut by the US Federal Reserve, causing concern among investors.

In the international market, spot gold and silver rates have decreased significantly. Spot gold prices dropped from $2370 to $2320 per ounce, while the spot silver rate decreased from above $30 to $29.69. The strengthening US business activity has led to increased demand for the dollar and US bond yields, resulting in the decline of gold prices. Spot gold fell 1.6%, and gold futures decreased by 1.5%, reaching $2333.80.

In terms of domestic gold prices, the 22 Carat gold rate fell by Rs. 800 to Rs. 66,350, and the 24 Carat gold price dropped by Rs. 870 to Rs. 72,380 per 10 grams.

Analysts attribute the drop in gold prices to the significant increase in the US dollar due to strong US business activity. This has shifted expectations regarding a potential interest rate cut by the Fed in September. If the Fed does not cut interest rates, further decreases in gold rates are possible.