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Gold Prices Stable: FM Sitharaman Assures Watchful Eye
23 Feb
Summary
- Finance Minister Nirmala Sitharaman stated gold prices are under government watch.
- Gold imports order value did not increase despite recent price surges.
- Global central banks' gold purchases contribute to price increases.
Finance Minister Nirmala Sitharaman has stated that gold prices in India have not exceeded certain limits and are being closely monitored by the government. She emphasized that while gold is a favored household investment and sees seasonal spikes during festivals, the current demand has not reached alarming proportions. Sitharaman highlighted that India relies heavily on imports for its gold supply, as domestic extraction is insufficient.
In parallel, RBI Governor Sanjay Malhotra indicated that the order value for gold imports has not risen, despite the recent surge in gold prices. This suggests that import volumes have remained stable. Globally, central banks are actively purchasing gold and silver, which analysts identify as a significant contributor to the current price increase. This international trend, coupled with speculative trading and geopolitical uncertainties, has led to volatile market sessions.
Despite recent price surges, gold and silver futures on MCX are currently trading below their late January highs. For instance, gold futures were trading at Rs 1.59 lakh per 10 grams, a decrease from the Rs 1.91 lakh peak in January. Similarly, silver futures are trading below Rs 4 lakh per kg. Analysts project a bullish near-term outlook for both metals, citing geopolitical risks, a weaker dollar, supply concerns, and strong investment and industrial demand.
