BackGold prices today fall for second day in a row, silver rates drop
Gold rates today struggled as Federal Reserve minutes struck a less hawkish note than markets had expected
PremiumGold and silver prices were muted in India today amid subdued global cues. On MCX, gold futures were dipped to ₹50,809 per 10 gram while silver fell 0.11% to ₹61,467 per kg. In global markets, gold dipped today to hover near the key level of $1,850 per ounce as as Federal Reserve minutes struck a less hawkish note than markets had expected. Among other precious metals, spot silver dipped 0.5% to $21.86 per ounce, platinum eased 0.1% at $943.15 and palladium was little changed at $2,006.61.
“On Wednesday, gold and silver prices dropped after a five-session positive close, weighed down by a rebound in the dollar after minutes from the Federal Reserve's May meeting showed that most participants believed half-percentage-point rate increases would likely be appropriate in June and July," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
“Sentiment-wise, market players shrugged off concerns that the Federal Reserve’s tightening cycle could cause a recession. The gold market is holding support above $1,850 an ounce. We expect gold and silver to remain volatile in today’s session. Gold has support at $1834-1822, while resistance is at $1862-1874. Silver has support at $21.55-21.40, while resistance is at $22.10-22.38. In INR terms gold has support at ₹50,740–50,510, while resistance is at Rs51,140–51,350. Silver has support at Rs60,980-60,650, while resistance is at Rs61,680–62,110."
The inflows into gold ETFs continued. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.2% to 1,069.81 tonnes on Wednesday from 1,068.07 tonnes in the prior day.
“COMEX gold trades little changed near $1850/oz amid choppiness in US dollar and bond yields post release of FOMC minutes. The minutes failed to surprise much as policymakers maintained support for two more rate hikes however central bank officials also indicated that aggressive moves may give them room to alter stance if required. ETF inflows however showed buying interest in gold while increasing risks to global economy increased gold’s safe haven appeal. Gold has come off the 2-week highs but is still holding near the key $1850/oz level. We may see price near this level amid mixed factors however Fed’s stance may keep a floor to the US dollar and this may keep pressure on gold prices," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
The US Federal Reserve's May policy meeting indicated that while officials would likely hike rates by 50 basis points at each of the next two gatherings, they were aware of the impact on the economy.
Higher short-term U.S. interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing. Gold is, however, seen as a safe-haven asset during financial crises. (With Agency Inputs)
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