Suryaa Business Desk: Disappointment for pasidi lovers in the international market. Paddy prices in global markets have declined marginally. West Asian tensions... Disappointment for pasidi lovers in the international market. Paddy prices in global markets have declined marginally. The main reason for this is the rise in crude oil prices due to the tensions in West Asia and the fears of a resurgence of inflation among investors.
In addition to this, a decline in gold prices was seen as investors remained cautious ahead of the meeting to be held by the Federal Reserve, the US central bank, regarding the determination of key interest rates. Crude oil prices rose again due to concerns over oil supply due to the West Asian crisis. Economists believe that higher fuel prices could lead to a rise in transport and production costs, leading to a resurgence of global inflation. Bond yields and the dollar index rallied, adding pressure to gold prices as speculation intensified that the Federal Reserve may slow the pace of interest rate cuts or keep interest rates at record highs for longer periods of time to curb these inflationary pressures. Generally, pasidi is in good demand as a safe investment during inflationary challenges and economic uncertainties. But when there are expectations that the Federal Reserve will continue its tight monetary policy, investors prefer to invest in US Treasury bonds and the dollar rather than investing in gold, which has no interest income.
The impact of these developments is evident on the crude spot market as well as futures trading. Market analysts say that the next direction of the greenback will be determined based on the decisions to be taken by the US Federal Reserve and the comments of Chair Powell. It is estimated that there is no possibility of immediate big relief in crude oil prices unless there are signs of revision of interest rates. Business circles are of the view that these short-term fluctuations in the international markets are likely to have an impact on the domestic bullion markets as well.