Gold prices in India fall to a 7-month low today after the Fed hiked interest rates

Gold and silver prices in India fell today along with a fall in international prices. On MCX, gold futures were near 7-month lows of 49,321, down 0.25% while silver fell 0.4% 57,059 per kg. In global markets, spot gold fell 1% to $1,656.97 an ounce, buoyed by a strong dollar and firm bond yields after the US Federal Reserve hiked rates another 75 basis points overnight and announced more rate hikes. Two-year US Treasury yields, which closely track Fed interest rates, rose further over 4% to their highest level since 2007.

The dollar index rallied to a fresh two-decade high, making the greenback-valued metal more expensive for buyers holding other currencies.

Gold is viewed as a hedge against inflation, but raising interest rates to tame inflation tends to increase the opportunity cost of holding zero-rate bullion. Spot silver fell 1.7% to $19.26 an ounce, while platinum fell 1.1% to $897.92.

Ravindra Rao, VP-Head Commodity Research at Kotak Securities said, “COMEX gold is trading slightly lower near $1668/oz, weighed down by US dollar strength post Fed decision. The US dollar index jumped to a fresh 2002 high as the US Federal Reserve forecast the possibility of another 0.75% hike this year and no rate cut until 2024. The US dollar is also supported by safe-haven buying and no significant change in monetary policy stance from other central banks. Continued US dollar strength could continue to weigh on gold. However, the Fed’s move was well-anticipated, so the market reaction may be fading.”

Despite the recent drop in gold prices, investors refused to buy into it. Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.12% on Wednesday to 952.16 tons from 953.32 tons on Tuesday.

Gold Price – Technical Outlook

“Gold has support at $1647-1640 while resistance is at $1670-1782. Silver has support at $19.05-18.85 while resistance is at $19.42-19.55. In rupee terms, gold has support at 49,040-48880 while resistance stands at Rs49,610, 49,760. Silver has support at Rs56,250-55,640 while resistance lies at Rs57,680-58,110,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

Catch all commodity news and updates on Live Mint. Download the Mint News app for daily market updates and live economic news.

More less

Subscribe to something Mint newsletter

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Post your comment

Comments are closed.