Why gold prices are falling!!

  1. Limit on gold import

Tough actions taken by both the government and the RBI to control gold import amid slowing investment demand against the backdrop of a strong rally in equities, which is rising as a preferred investment asset class, are taking some sheen out of the gold.

  1. Higher domestic gold investment

India was the top consumer of the metal in 2014 and the second biggest after China in the first quarter of this year.

Higher domestic gold inventories is also having an impact on price movements of the yellow metal, a bullion trader said.

  1. Massive selling in China

China on Monday dumped a huge amount of gold on the market, causing the price of the precious metal to fall drastically.

Reports that China gold reserves were half the expected level added additional selling pressure on gold.

According to reports, some 33 tonnes were sold in the Shanghai spot market on Monday as investors sought to shift focus to other avenues.

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