Gold prices drop further today, near lowest in over a month
2 min read . Updated: 14 Sep 2022, 06:17 PM IST
Premium- Gold rates continue to be under pressure today after stronger-than-anticipated US inflation numbers
Gold prices today slipped after a sharp selloff in the previous session. On MCX, gold futures were down 0.1% to ₹50,087 per 10 gram while silver fell 0.2% to ₹56719 per kg. Gold and silver prices fell sharply on Tuesday on the back of a strong US inflation data that also sent the dollar index and bond yields higher. In global markets, gold was flat today and traded near $1,704.03 per ounce.
“COMEX gold traded flat weighed down by recovery in the US dollar and higher bond yields in reaction to US inflation data. A slightly bigger than expected rise in consumer prices rekindled worries that the Fed may continue with aggressive rate hikes. The Fed is largely expected to raise interest rate by 0.75% in the coming week and market players now expect Fed to continue with aggressive hikes going ahead. Gold witnessed a sharp rebound which ran out of steam close to $1750/oz level and prices may remain under pressure as focus shifts to upcoming Fed meeting," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
The stronger-than-anticipated US inflation numbers have cemented the likelihood for a jumbo-sized rate hike at the (Fed meeting, scheduled next week. Gold is seen as a hedge against inflation, but higher interest rates increase the opportunity cost of holding it. The dollar index eased a bit today, making gold less expensive for overseas buyers.
Gold rates had prices in the previous session saw their biggest one-day percentage fall since July 14, as the dollar logged its best day since March 2020 after an unexpected rise in U.S. August consumer prices. In India, gold had dropped ₹500 per 10 gram on Tuesday.
Gold Technical Outlook
Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said: “Gold has support at $1696-1682, while resistance is at $1718-1726. Silver has support at $18.78-18.55, while resistance is at $19.28-19.45. In rupee terms gold has support at ₹49,940-49810, while resistance is at Rs50,380–50,540. Silver has support at Rs56,050-55,640, while resistance is at Rs57,180–57,610."
Meanwhile, in global equity markets, a semblance of calm returned after Tuesday's rout sparked by hotter-than-expected American inflation. Shares had their biggest drop in more than two years Tuesday, with the S&P 500 falling more than 4% and the Nasdaq 100 sliding more than 5%.
Today, US equity-index futures were higher while a gauge of the dollar retreated after jumping the most in three months on Tuesday. (With Agency Inputs)
