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Business News/ Markets / Commodities/  Gold, silver prices today extend fall on strong US dollar, Fed's Powell remarks
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Gold, silver prices today extend fall on strong US dollar, Fed's Powell remarks

MCX gold is expected to break the key support level of 54,900 to continue its downward trend towards the level of 54,700, as per commodity experts

Showcased gold necklaces at a jewellery showroom (REUTERS)Premium
Showcased gold necklaces at a jewellery showroom (REUTERS)

Gold rates today extended their fall from Tuesday, trading at 54,940 per 10 gm on the MCX on Wednesday, down by 80 or 0.15%, after the US Federal Reserve Chair Jerome Powell said interest rates might need to go higher than previously expected to curb inflationary pressures. In the currency market, the US dollar continued its charge, touching three month high.

"Gold is likely to trade with a negative bias for the day on the back of strong US dollar and rising US treasury yields. Further, bullion prices may be pressurised as hawkish comments from Fed Chair Jerome Powell raised expectations of a 50 basis point interest rate increase in March meeting. As per CME’s Fed watch tool, financial markets have priced in a 70% chance of 50 bps rate hike in upcoming meeting. MCX gold is expected to break the key support level of 54,900 to continue its downward trend towards the level of 54,700," said analysts at ICICIDirect.

MCX silver prices also continued to drop and trading at 61,810 per kg, lower by more than 378 or 0.6% and is expected to continue its downward trend towards the level of 61,500, as per ICICIDirect.

The US Federal Reserve will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the "totality" of incoming information suggests tougher measures are needed to control inflation, Powell said on the first day of his semi-annual, two-day testimony before Congress. 

The US central bank had slowed to a 25-basis-point interest rate hike in its last meeting, after larger rate hikes last year to fight decades-high inflation, but a slew of data in recent weeks spurred concerns that the Fed would persist with monetary policy tightening.

(With inputs from agencies)

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Published: 08 Mar 2023, 11:57 AM IST
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