Best time to buy gold; prices drop sharply, down by Rs 1000 per sovereign

THIRUVANANTHAPURAM: The price of gold has dropped sharply in the international market amid concerns that the United States may raise interest rates again as the war in West Asia intensifies inflationary pressures. The massive sell-off in gold was driven by investors withdrawing large amounts of money from the precious metal as the yield on 10-year US Treasury bonds reached its highest level in two decades.

In Kerala, the price of 22-carat gold fell by Rs 125 per gram. The market price today stands at Rs 13,640 per gram. The price of one sovereign (8 grams) dropped by Rs 1,000 to Rs 1,09,120. Gold prices had already fallen by Rs 2,640 per sovereign in two rounds of declines yesterday. Prices have now reached their lowest level of September. At one point yesterday, gold prices fell by $150 per ounce to $4,130.

Stock Market

Concerns over an escalation of the West Asian conflict and a sharp rise in US Treasury bond yields triggered a bloodbath in the Indian stock market. Investors grew increasingly anxious as crude oil prices surged after US President Donald Trump rejected Iran's proposals for a ceasefire and the reopening of the Strait of Hormuz. Brent crude oil prices rose 2% to cross $107 per barrel.

The Sensex closed down 1,124 points at 72,771.72, while the Nifty fell 360.25 points to settle at 22,780.25. Of the 30 companies in the Sensex index, only one recorded gain. Shares of L&T and Power Grid fell by 3%. Adani Ports, HDFC Bank, Hindustan Unilever, Reliance Industries and SBI also suffered significant losses. The mid-cap and small-cap indices declined by 2%.

Rupee under pressure
Rising crude oil prices and the withdrawal of foreign investors intensified pressure on the Indian rupee. The rupee closed at 96.03 against the US dollar yesterday, losing 28 paise. The 10-year US Treasury bond yield reaching 5.2% yesterday also weighed on the rupee.