In India, gold plays several roles. It isn’t just used to adorn oneself but as a symbol of status and, more importantly, as a vehicle for investment. The price of this precious metal is, therefore, of much consequence to the people of our wonderful country.
Federal Reserve Chair Janet Yellen commented yesterday that she was “looking forward” to a rise in the US Interest Rate. One wonders what this could possibly mean to the average individual. Well, it certainly means something to anyone who buys gold because this comment led to a major fall in the gold price. In fact, it has slumped to the lowest it has ever been since 2010!
Why did this happen? It’s simple really. The market has taken these comments as an indication that the Federal Reserve will raise rates next month and if this happens, it will have a direct impact on the price of gold. In anticipation of this, the price of gold has slumped to a nearly six-year low.
Spot gold fell as far as $1,045.85 an ounce and US gold futures fell to $1,045.40.
What do Indians do when something like this happens? We go shopping, of course, as seen by the doubling in gold imports over November when gold prices fell to a five-year low.