Setback for those waiting to buy gold, won't the price drop anytime soon? Here's the reason

Gold is once again gaining popularity as a safe-haven investment after US President Donald Trump announced new tariffs. Investors are cautious as Federal Reserve Chairman Jerome Powell is set to announce his stance on interest rate cuts today. The price of gold in the international market jumped to $3,380 per ounce yesterday. The price has jumped by $120 in a single day. The escalating political tension between India and Pakistan has also increased investors' concerns.

Following the international market, the price of gold in Kerala rose by Rs 2,000 per sovereign to reach Rs 72,200. The price of a gram rose by Rs 250 to reach Rs 9,025. Since the last week of April, gold prices have been falling continuously, leading to a revival in sales of jewellery. Traders are worried that the sudden price hike will hurt gold jewellery sales. The prices of silver and platinum have also moved up.

Federal Reserve decision crucial

Federal Reserve Chairman Jerome Powell's stance on the economic sector will be the factor that mainly influence the movements in the gold market. It is estimated that gold will move up as a safe investment if Trump's trade war causes a recession in the United States. The gold price will move to new highs even if the Federal Reserve decides not to cut the key interest rate this year.

Stock market decline

The Indian stock market suffered losses yesterday as investors intensified their profit-taking. The Sensex fell 155.77 points to 80,641.07. The Nifty fell 81.55 points to 24,379.60. Reliance Industries, Bank of Baroda, Zomato, SBI, Tata Motors and Bank of Baroda were the main losers. Mahindra & Mahindra, Bharti Airtel and Nestle made gains.