World Gold Council Report Out: Gold Prices Could Fall around Rs 89,000

Gold prices could witness a significant decline in the coming months, according to a report by the World Gold Council (WGC). The report suggests that international gold prices could fall to around $3,857 per ounce, raising expectations of a major correction in the precious metal market.

If global gold prices were to decline by 37%, as projected in the report, the price of 10 grams of gold in India could fall by nearly Rs 53,000, bringing it down to around Rs 89,000.

WGC Predicts Further Downside:

The World Gold Council has warned that if gold prices drop below $3,857 per ounce, the market could witness an even steeper decline. According to the report, the next major support level for gold lies at $3,500 per ounce.

Compared to the record highs seen earlier this year, a fall to $3,500 per ounce would represent a correction of nearly 37%. Analysts believe such a decline could mark one of the biggest corrections in the gold market in recent years.

Several global factors are putting downward pressure on gold prices, including the strengthening of the Japanese Yen, uncertainty over future US Federal Reserve interest rate decisions, ongoing geopolitical developments, and heavy withdrawals from Gold Exchange-Traded Funds (ETFs). These developments have weakened investor demand for gold, contributing to the recent decline in prices.

Impact on Gold Prices in India:

If the projected 37% decline materialises in the global bullion market, the price of 10 grams of gold in India could decrease by approximately Rs 53,000, potentially falling to around Rs 89,000.

Stronger Yen May Offer Some Support:

The World Gold Council noted that the recent joint intervention by the United States and Japan in the currency market has strengthened the Japanese Yen. A stronger Yen combined with a weaker US Dollar could provide some stability and support to gold prices in the near term.

Currently, gold is trading at around $4,063.80 per ounce in the international bullion market. On the London Bullion Market Association (LBMA), gold closed at approximately $4,027 per ounce last week, down nearly 1%. Overall, gold prices have declined by about 7.8% so far this year.