Kathmandu. Gold is always considered a safe investment. When there is tension or war in the world, investors flock to it. This is because uncertainty increases in other markets.
The price was Rs 2,36,300 per tola in the Nepali market today. On October 14, the price of gold has reached Rs 2,58,000 in the Nepali market. The price of gold has come down by Rs 22,000 from this high.
However, when the world returns to peace, the price of gold is likely to fall. At present, there are indications that the price of gold may fall. There are 4 main factors that can cause the fall in the price of gold.
U.S.–China Trade Agreement
The US and China, the world’s two most powerful countries, have been destabilising global markets for years due to trade wars, tariffs and supply chain tensions. However, there are some trade deals between the two today. The world is breathing a sigh of relief. China was increasing its gold reserves to compete with the United States. As a result, the price was rising.
Now the situation is changing. Positive discussions are taking place between the two countries. If the discussion turns out to be positive, investor confidence will return to the stock market and the industry. The U.S.-China trade deal could prove to be a major downside trigger for gold. This can lead to a fall in prices.
India–US Trade Agreement
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India is the world’s second-largest consumer of gold. Therefore, if there is a strong trade relationship between India and the US, it will have a direct impact on the price of gold. The new trade deal will attract foreign investment to India. It will strengthen the Indian rupee against the dollar and boost economic activity. When the Indian rupee is strong, it is cheaper to buy gold in India.
As a result, even if international rates remain stable, the price of gold in the Indian market will fall. Investors looking to invest in gold may find relief in the coming months.
Israel–Hamas ceasefire
The Middle East has always affected the global economy. The long-running conflict between Israel and Hamas has not only exacerbated the humanitarian crisis but also sparked fear in the global market. The price of oil has gone up. Supply chains have been disrupted and investors have bought gold in search of safe havens.
Ceasefire talks between the two sides are currently underway. Trump himself is leading this effort. If this materializes, the market will stabilize. It also dims the shine of gold. Investors move their funds to profitable sectors such as stocks, bonds, and real estate. This will naturally reduce the price of gold.
Pakistan–Afghanistan ceasefire
International investors are often cautious about the volatility in South Asia. A permanent ceasefire between Pakistan and Afghanistan will boost economic stability and trust in the region. However, these two countries do not make significant contributions to international trade. A peaceful environment will open doors for trade, investment and regional development.
Investors are willing to take risks in such an environment and when investors return to the stock market, the demand for gold decreases. This means that if the guns are silent in South Asia, the price of gold will also decrease.
However, the US has played a direct and indirect role in these four incidents. If US President Donald Trump is able to manage these four aspects as he wishes, then the price of gold will be reduced.
