22K Gold Loses Shine In India, Sees Biggest Single Day Fall In Months? Factors Causing Dip

Gold and silver prices have witnessed a huge decline on Tuesday In India. The price of 24K gold fell by Rs 770 at Rs 51,160 per 10 grams while the price of 22K gold declined by Rs 700 at Rs 46,900 per 10 grams in India.

The prices of 22K and 24K gold have been falling for the last two days. Yesterday 22K gold price registered a dip of Rs 250 at Rs 47,600 per 10 gram and 24K gold price saw a fall of Rs 270 at Rs 51, 930 per 10 grams. The decline in the prices of gold today is a biggest single day fall in nearly 3 months.

Silver prices too declined on Tuesday. Silver prices fell by Rs 600 per kg at Rs 58,900 per kg. There was a strong decline of Rs 1300 in the prices of silver yesterday at Rs 59,500 per kg.

Why gold prices are falling now?
"Gold prices are taking their cues from the build-up in rate-hike expectations from last week, brought on by the hotter-than-expected U.S. job report," IG market strategist Yeap Jun Rong said, adding that gold prices seemed to remain locked in a downward trend for now, according to a Reuters report.

The Friday data indicated that US job growth reduced moderately in September. Meanwhile, unemployment rate dipped, signaling a resilient economy and dousing hopes of a Fed pivot anytime soon, added the Reuters report.

It is worth noting that traders are largely anticipating yet another 75-basis-point rate jump at the Fed meet next month.

While gold is often seen as a hedge against inflation, rising U.S. interest rates increase the opportunity cost of holding the non-yielding gold. Gold prices have declined more than $350 since surging past the $2,000-mark in March, amid aggressive U.S. monetary policy tightening, stated the Reuters report.

Spot gold is expected to fall into a range of $1,660 to $1,674 per ounce, as it has more or less broken a support at $1,689, according to Reuters technical analyst Wang Tao.

Check 22K and 24K gold price in major cities of India: