Gold prices climbed sharply across the world for months. Fears about inflation, wars, and weak currencies pushed people toward safe options, and gold has long been seen as a place to protect money.

Investors rushed in, demand rose quickly, and prices surged.

Large funds and professional traders joined the rally. Many used borrowed money to increase their bets in international futures markets.

When prices keep moving in one direction and leverage is high, even a small change can lead to big losses.

That change came sooner than many expected.

Markets began to believe that interest rates in major economies would stay high for longer. The US dollar strengthened, which usually hurts gold.

Bonds and bank deposits started looking attractive again because they offer consistent returns.

Gold does not pay interest, so when rates and the dollar rise, its appeal drops in the short term.

Large investors responded by booking profits and cutting their positions.

Once prices started falling, futures markets made the move sharper. Margin calls kicked in. Automatic sell orders were triggered. Traders were forced to exit, which led to more selling and faster declines.

The very forces that had pushed gold higher now turned against it. Fear faded, easy money dried up, and heavy borrowing became a burden.

India feels these global swings very strongly because it imports most of its gold. International prices and the rupee dollar rate directly affect domestic rates.

On the MCX exchange, gold and silver futures hit highs and........

© Kashmir Observer