Gold Prices See a Significant Drop From Recent Highs

Gold prices have experienced a notable decline, falling by ten percent from the record high reached in mid-October This significant correction in the market has captured the attention of investors, who are now contemplating their next move.After a period of historic highs, several factors have contributed to the downward trend in gold prices. Profit booking by institutional investors and gold producers has played a significant role. Once the precious metal reached its peak, many decided to capitalize on the high prices, leading to increased selling pressure.Another contributing factor is the recent ceasefire between Israel and Hamas. Gold is often seen as a safe-haven asset during times of global uncertainty. With the easing of geopolitical tensions, the demand for gold as a security measure has decreased.Despite the drop in prices, central banks of major countries have continued to purchase gold. In the third quarter of the current calendar year, central banks collectively bought 220 tons of gold. This indicates a strategic shift by nations to prioritize gold alongside the US dollar in their reserves.Furthermore, there has been a decline in domestic demand for gold following the festive seasons of Dussehra and Diwali.Demand for jewelry has seen a sixteen percent year-over-year drop as consumers are exploring other investment options like gold coins and ETFs.This shift in consumer behavior has also impacted the overall price of gold.