As the US-China tariff war escalates and rupee falls in value, there looms a threat on the gold and diamond industry with the rise in gold prices over the short term. Though, the medium term outlook is moderate due to consumer demand from the medium class plus the momentum in economic growth.
In India, the gold of 22k purity was trading at Rs.30,250 while that of 24K is retailing at Rs. 31510.
And here are few facts about the current price trend in gold
1. Demand for dollar as well its upward trajectory when compared to other emerging economies currencies is putting an additional pressure on the yellow metal, spurring the sell-off.
2. The sentiment in the gold has also got a lift due to the ongoing tariff war between the US and China. And if the situation get worsens, prices in the precious metal will spike.
3. Rupee's further fall due to no change in supply of oil output by the OPEC will put a pressure on the rupee against the dollar and one may see some more rally in gold prices which however is expected to remain capped as per analysts.