Winning Bizness Desk
Mumbai. Severe aar has started on the Gaza Strip after Hamas fired 5000 rockets at Israel on October 7 with Israel promising to take complete control of the Gaza Strip. On the other hand, Hamas is also claiming that its preparations are solid and it is not going to bow down under the pressure of Israel. Meanwhile, gold and silver, which were running in a range for a long time, have also started taking a turn. It is understood that in the next few days, gold may rise faster than its normal rate. Whenever there is a conflict or war between countries in the world, the price of gold increases. Not only gold, silver also turns into gold. Earlier, you might have noticed that gold had started becoming expensive when the war between Russia and Ukraine started. On Wednesday (October 11), the price of gold on MCX was at Rs 57,883 while silver was trading at Rs 69,663. These prices are for futures trading. In the last 4 days, the price of gold has increased by about Rs 1500. Similarly, the price of silver has also increased by Rs 3900 in the last 4 days.
Now the question arises that after all, gold and silver generally seem to be sluggish, but why do their prices start increasing rapidly in war-like situations? Be it a fight between two countries or a global epidemic like Covid, gold was always shooting up. In fact, there is an inverse relationship between dire situations and precious metals gold and silver. When there is peace all around, big investors turn to equity markets and invest more money in this market. The advantage of investing money in equities is that they get better returns than any other asset. Big investors, who have the power to move the market, do not lose their money. Their investments are always in such a place from where they get profit.
What experts saying
According to experts, when two countries fight or a global crisis arises, markets around the world are affected. With the impact on the markets, the equity market starts falling. Sensing this situation, big investors move their money. They reduce investment in equities and start investing in gold and silver, which are considered the safest assets. If they suffer loss in equity, they will compensate it with gold and silver. This is the reason why in times of crisis the prices of gold and silver start moving upwards.
Festival also nearing
At present, one of the reasons behind the increase in the prices of gold and silver is the return of enthusiasm in the Indian markets. Since India is one of the largest consumers of gold, people buy gold and silver during the festive season. With the start of Navratri from 15th October, auspicious works will also start and people will start shopping. After that there is Dhanteras, Diwali and then the wedding season. In such a situation, it is normal for the price of gold and silver to go up.
