Here’s Why Gold is going up despite a rally in the Stock Market

24-karat gold price in Chennai has hit a new high of Rs 72.150 per 10 grams.

You’ve probably heard the saying “when the market turns bearish, gold prices tend to rise.” But why is gold soaring amid a historic rally in the U.S. stock market?

The main drivers are a possible interest rate cut by the US Federal Reserve in the next couple of quarters, as well as China’s aggressive hoarding of gold. Other factors include rising geopolitical tensions in central Asia, a depreciating rupee, and heightened uncertainty during an election year.

On April 8, gold prices surged further on the MCX, with Gold futures, which expire on June 5, closing at Rs 70,987 per 10 grams, up.49 per cent from the previous close. Analysts said that gold prices were driven by fresh positions built up by market participants, PTI reported.

On Monday, the 24-karat gold price in Delhi touched a new high of Rs 71,430 per 10 grams. The price in Mumbai stood at Rs 71.280 per 10 grams, while in Chennai it stood at Rs 72.150 per 10 grams.

Shaktikanta Das, the governor of the Reserve Bank of India, said on April 5 that India is building up gold reserves as part of its foreign exchange (forex) strategy.

As part of its reserve deployment, the Reserve Bank of India (RBI) is building up its gold reserves, said Das, speaking to reporters at the usual policy review press conference held here.

According to the World Gold Council, the Reserve Bank of India (RBI) purchased 8.7 tonnes of gold in January, the highest amount in two years. At the end of January, the central bank’s gold holdings stood at 812.3 tonnes, down from the previous month’s figure of 803.58 tonnes.

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