BackGold rate today under pressure after US Fed's hawkish rate pause. Buy or wait for mode correction?
Gold rate today: Bullion prices are under pressure despite rate pause decision in US Fed meeting beduase the US central bank has raised median interest rates from 4.6% to 5.1%, say commodity market experts
PremiumGold rate today: Despite rate pause decision in US Fed's meeting on Wednesday, gold price today is under sell off pressure. Gold future contract for October 2023 expiry on Multi Commodity Exchange (MCX), opened lower at ₹59,315 per 10 gm levels and went on to hit intraday low of ₹59,004 levels within few minutes of commodity market's opening bell today. In international market, gold price is oscillating around $1,928 per ounce levels.
Likewise, silver rate today opened lower at ₹72,970 per kg levels on MCX and went further down and hit intraday low of ₹72,195 levels in few minutes of the market's opening bell. In international market, silver rate today is oscillating around $23.16 per ounce levels.
Why gold price today under sell off pressure?
Speaking on the reasons that dragged down gold prices today, Amit Sajeja, Vice President — Research at Motilal Oswal said, “Gold rates today are under sell off heat after hawkish rate pause decision at US Fed meeting on Wednesday. On one hand, the US central bank kept interest rates unchanged while on the other hand it raise media interest rates from 4.60 per cent to 5.10 per cent, which is an signal that there won't be rate cut in coming years after its meetings in November and December this year."
Amit Sajeja of Motilal Oswal said that global gold ETF market is also not giving positive signal for the gold prices in near term. He said that people are booking profit in gold ETF market and hence gold prices are under pressure and the trend is expected to remain the same in short to medium term.
“In next two to three months, gold price are expected to remain range-bound in $1,880 to $1,980 per ounce levels but demand in domestic market in upcoming festive season is expected to limit the downside movement in the precious metals. In fact, demand in international market would also surged during November to Februray period in international market. So, downside movement is limited and hence one can maintain buy on dips strategy in regard to gold and other bullions," said Amit Sajeja.
Rise in crude oil prices
Pointing towards rising crude oil prices, Anuj Gupta, Head — Commodity & Currency at HDFC Securities said, “Recently crude prices have rallied that has renewed fear of inflation. This also triggers US Fed rate hike, which is negative for the gold and other precious metal prices."
The HDFC Securities expert maintained that rise in media interest rates in the US Fed meeting on Wednesday is expected to work as taper for bullions across world in near term. However, he also maintained that rise in demand in domestic and international market is expected to limit the downside movement in gold and other precious metal prices.
On broader range in which domestic gold prices are expected to hower around, Amit Sajeja of Motilal Oswal said, “On MCX, gold prices are expected to remain in ₹58,000 to ₹60,500 per 10 gm levels in next two to three months and there is opportunity for both way trade. One can either maintian sell on rise or buy on dips. But, those who have medium to long term view, my suggestion for such investors is to maintian buy on dips strategy."
Outcome from US Fed meeting
The US Federal Reserve held interest rates unchanged but stiffened its hawkish stance, with a further rate increase projected by the end of 2023. The US central bank also hinted to keep monetary policy significantly tighter through 2024 than previously expected.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
