Gold prices are falling dramatically in India today

Gold prices continued to fall today, India has collapsed demand for gold

In brief: Gold prices decline on a background of falling demand in India. The overall level of support from the bulls on gold is reduced to a minimum.

Gold prises fall rapidly enough. India, which gold market is the largest all over the world, caused gold prices to fall today. On Monday, June 21 quotes for gold with a decrease in the price in a reduction of cash flows for the assets-seekers. As a result of trading on the COMEX, division of the New York Mercantile Exchange (NYMEX), quotes gold futures fell to 17.60, or 1.4%, to 1240.70 dollars per troy ounce, quotes, silver futures fell 38 cents, or 1.9%, to 18.85 dollars per ounce. The price of gold on the spot market in the U.S. amounted to U.S. $ 1244.50 per troy ounce (-12.50 dollars).

On Monday 21 June futures on precious metals (gold) closed with a decrease in the price of the following factors: 1 – strengthening the U.S. dollar on the Forex market against the backdrop of economic output makrostatistiki news and negatively affected the “gold” quote (the price of gold tend to move in the opposite direction from the U.S. dollar, as the strengthening U.S. currency makes gold more expensive for holders of other currencies); 2 – gold as an asset of refuge – the demand for gold as an asset of refuge, on Monday declined slightly, as the increased risk appetite has led to a reversal of flows of funds in favor of riskier assets after the Chinese authorities over the weekend have reported rejection of the informal peg of its currency to the dollar. Many economists believe the yuan undervalued, and its growth could allow China to buy more raw materials; 3 – for technical reasons – the decline in gold prices has accelerated in the late afternoon, when investors speculated that the peak price for the passes, closed their long positions in order to obtain cash after watching the recent growth in prices. Since April, gold jumped more than 10%. Prices of silver also closed with a decrease in price, following the price of gold. Quotations of futures on platinum and palladium rose slightly, because the rate of increase in industrial activity affected them more than the outflow of funds from the assets of refuge. Metals supported hopes that revalued the Chinese currency could lead to increased Chinese demand for industrial metals. Platinum and palladium are used for the production of catalytic converters, as determined by their relationship to the demand for cars.

From the news it may be noted that in the past two years in Dubai made drastic changes in the demand for products refiners. If the end of 2008 almost all the gold from the refiner, went to the jewelry market, now about 90% of output is sent to the financial markets, in particular, through index funds (ETF), as well as through futures. This did not happen for no reason. A month ago the world “industry” of index funds totaled 2.189 ETF with assets of $ 1.113 billion for 42 markets. Companies that understand the potential of Dubai as a center for recycling, already use the opportunities of the emirate and provide new equipment and technology for processing gold ore. Speculative buying of precious metals from foundations and banks, the use of gold as an asset of refuge as well as lowering the U.S. dollar will provide sustained support for quotations of gold and silver. However, the situation could change dramatically if the dollar will resume its strengthening, as the inverse correlation between the dollar and the prices of precious metals continues. Volatile changes in the currency market may be reflected in the sharp fluctuations of prices for precious metals.

Anrey Torbinski
2010-06-22 11:26, Commodities.

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