What’s Causing The Sharp Drop in Gold Prices in India & Globally?

New Delhi: A sharp fall in gold prices this past week took investors by surprise. But analysts say it was expected, as economies globally recover from lockdown and improving high-frequency data sets raise appeal for risky asset classes. However, they don’t expect the yellow metal prices to drop sharply, as a weak dollar and US-China trade tensions are expected to support prices in the near term.

Gold prices enjoy an inverse relation with equities, which have been rallying of late on hopes that the global economic recovery from the coronavirus crisis will be faster than expected. A sharp drop in US unemployment rate in May and solid PMI readings in some of the Asian economies have weakened the safe haven appeal of the yellow metal…

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