Gold prices today fall to near 1-year lows. In India, rates dip below  ₹50,000

Gold prices today fall to near 1-year lows. In India, rates dip below ₹50,000

Market


In global markets, gold rates fell to lowest in nearly a year, buffeted by an elevated US dollar.  Prospects of more interest rate hikes by major central banks also weighed on bullion’s appeal. Spot gold today fell to $1,691.40, the lowest since August 2021.  A stronger US dollar makes greenback-priced bullion more expensive for buyers holding other currencies. 

In India, the fall has been less steep due to the recent import duty hike on the yellow metal. MCX gold futures were down 0.5% to 49,958 per 10 gram, the lowest since February,  while silver fell 0.88% to 55130 per kg. India imports most of its gold requirement. Besides global rates and rupee-dollar movement, domestic prices also track change in different levies like import duty and GST. 

Commodity traders will be focused on the European Central Bank policy outcome today. The ECB is expected to raise interest rates for the first time in 11 years. Next week, the policymakers of US Federal Reserve will meet to decide on interest rate. The Fed is  widely expected to raise interest rates by 75 basis points at its policy meeting next week to combat inflation. 

Although gold is seen as a hedge against inflation, rising interest rates increase the opportunity cost of holding bullion, which pays no interest. 

Despite the price dip, ETFs continued to see outflows. The holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell 0.3% to 1,005.87 tonnes on Wednesday from 1,009.06 tonnes on Tuesday. 

Among other precious metals, spot silver was flat at $18.66 per ounce while platinum eased 0.2% to $856.12. (With Agency Inputs)

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