Gold, Silver Price Correct Sharply After Gold Internationally Nears $1700/oz

Gold as well as silver in the retail market in India have fallen sharply. Gold has seen a fall by between Rs. 400-430 per 10 gm, while silver has cracked even sharply by about Rs. 1900/ kg.

The lacklustre back home is guided by the trend overseas as gold in the spot market there nears $1700 per oz level. Last at the time of writing this copy at around 12:13 pm (IST) quoted at $1702.3 per ounce. With it the crack in gold price has been deepening and as per Kitco it is now over 7% or -$131.5 down in a month's time.

Why the hard blow out for gold of $40 per oz in a day?

The recent US CPI data which came in at a 41-year high assures of an even higher rate hike by the Fed and this has indeed caused panic among investor community.

In fact for a brief period, gold prices in the previous day's trade breached $1700 per ounce level. Also, as viewed by experts there is anticipated capitulation event for gold i.e. investors may give up on the loss in the precious metal, which may see it fall further.

Nonetheless the saviour in disguise for gold can be recessionary fears and other geo-political crisis.

"The yellow metal is feeling the heat from the inflation data and aggressive tightening in response. We could see its popularity improve once we see the peak in the inflation data, which we may now have in the U.S., but its tendency for upside surprises will leave investors cautious," Erlam-, senior market analyst at OANDA is cited as saying in a Kitco report.