REASON FOR INCREASE IN THE PRICE OF GOLD??

On the futures market, gold values in India reached a record-breaking level of 56,245 per 10 grams today, surpassing the previous high of 56,191, set in August 2020. Due to a weaker US currency and expectations of a pause in Fed rate rises, gold has increased from levels near 50,000 in November. In international markets, gold was trading close to $1,906 per ounce and was expected to post increases for a 4th successive week.

A decrease in US price inflation and anticipation of more gradual interest rate increases were the latest catalysts for the price of gold. The United States consumer prices dropped in December for the first time in more than two years, according to data released on Thursday, raising the prospect that inflation is finally on the down. According to the Labor Department's data, retail prices in the US increased 6.5% on a yearly basis in December, which was expected after a 7.1% increase the prior month.

Political uncertainty and Western economic fears too have contributed to the increase in gold prices. Investments are frequently attracted to gold during periods of economic uncertainty, stagnation, and recession because it is regarded as a safe harbor.

Axis Securities advises a "Buy-on-Dips" strategy and holds a neutral view of gold. As a did try insurance against the other risky assets, gold will continue to draw investors until concerns over the Russia-Ukraine war subside, according to the brokerage.

As per Emkay Wealth Management, central banks purchased a net of 50 gold ounces in November, an increase of 47% month over month. The emphasis on gold prices will be maintained by a sustained rise in rates and anticipation of Fed rate increases. Considering the longevity of inflation and the distance between goal levels and the actual inflation reading, any adjustments in policy, if any, will not occur for at least two quarters. With the proper indicators in bond yields, particularly US rates, gold is primed to increase, the report stated.