Gold rates today at lowest in nearly two months after sharp fall


Gold prices continued to remain under pressure this week as as worse-than-expected US inflation increased expectations of a jumbo-sized increase in interest rates by the Fed next week. Gold is sensitive to US interest rates. Higher yields increase the opportunity cost of holding non-yielding bullion while boosting the dollar. A stronger US dollar makes gold expensive for buyers holding other currencies.

In India, gold fell to lowest  in nearly two months when MCX futures dropped 0.3% to 49856 per 10 gram while silver dipped 0.2% to 57,290 per kg. 

In global markets, gold fell 0.3% to below the key level of $1,700 per ounce. Spot silver dipped 0.6% to $19.57 per ounce. Investors are now fully pricing in a 75 basis point rate hike when the Federal Reserve board meets next week. Some market observers are even predicting a full percentage point increase.

Analysts also say that economic slowdown in China could also impact gold jewelry demand in the world’s biggest consumer of the precious metal.

Despite the dip in bullion prices, investor interest has been weak. The holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell 0.24% to 960.56 tonnes on Wednesday from 962.88 tonnes on Tuesday. 


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