Gold Price: Gold prices are increasing rapidly in foreign markets. But some reversal was seen in the domestic markets on Monday.
The rising trend in gold prices continues. But in the domestic market the prices have fallen on Monday to Rs 61,600 per ten grams. Whereas, a day earlier the price was Rs 61,850 per ten grams. But in a few days the price has increased from Rs 59,000 per item to Rs 61,000. Experts say that at present the possibility of a big increase in prices is very less. But from here the prices may remain stable or there is every possibility of a decline.
Why is gold expensive? Due to the sudden rise in gold prices, there is a war going on between Gaza and Israel. Apart from this, stock markets have declined due to increase in bond yields. The 10-year Treasury yield has crossed the 5 percent mark for the first time in the last 16 years. The jump in yields has been seen on expectations that the Federal Reserve can keep rates elevated and the government will make money to finance the growing deficit. Can increase bond sales. According to the released data, the yield has increased to 5.01 percent, which is the highest level since 2007.
Apart from this, the demand for safe investment of gold has increased. In the coming days, this war will also be digested by the market. Therefore, there may be pressure from upper level on gold prices.
Experts say that the increase in borrowing costs will have an impact on the American economy. This is likely to affect demand. In recent times, 30-year fixed mortgage rates have averaged as high as 8 percent. This will affect loan based sales, credit card expenses etc. Even though this may give hope for a softening of the inflation rate, there will be pressure on the economy.
It is common for companies and governments to raise funds through bonds. Interest is paid on bonds at a specific rate which is fixed. Along with this, these bonds are also traded in the secondary market. In such a situation, if an investor feels that the interest rates will increase in the coming time, then the bonds already issued at low interest are not a profitable deal for him.
When the demand decreases, the price of that bond decreases in the secondary market, the effect of which is that there is such a difference between the price and the price of the bond that it proves to be an attractive alternative to bonds with higher interest rates, this difference is called yield. . In fact, the high yield compensates for the high interest rate. In other words, when the yield is high, it is believed that investors are expecting higher interest.
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