Home / News / India /  Gold prices today near lowest in 3 months, silver rates drop

Gold and silver rates today edged lower in Indian markets, tracking subdued global cues. On MCX, gold futures were down 0.13% to 50,158 per 10 gram while silver struggled at 60,697 per kg. After coming closer to 56,000 mark in early March, gold has struggled under the shadow of an aggressive Fed monetary policy stance. Higher US short-term interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing. A stronger dollar makes gold less attractive for buyers holding other currencies.

“US equity markets corrected sharply in yesterday’s day of trade, with the S&P correcting as much as 4%, the most significant daily decline since June 2020. To add to that, the US 10 year yields were down 10 bps to 2.88%, which offered a little support to gold prices," said Pritam Patnaik, Head - Commodities, HNI, and NRI Acquisitions, Axis Securities.

“Ideally, these are excellent conditions for a gold rally, but a strong dollar and more significantly, an extremely hawkish Fed has not only capped the rally but stalled it. Gold is caught in a tug of war between recessionary safe-haven demand and aggressive Fed driven inflation control drive. This leaves the bullion investor currently in a no trade zone. There is a clear negative bias in the short term, with a sell all assets mode entering the global markets," he added. 

In global markets, gold was steady at  $1,816.39 per ounce. Spot silver edged up 0.1% to $21.41 per ounce, while platinum dropped 0.9% to $927.37, and palladium slipped 0.6% to $2,004.58.

Ravindra Rao, VP- Head Commodity Research at Kotak Securities, said: “COMEX gold trades marginally lower weighed down by pause in recent slide in US dollar index and weaker ETF investor interest. Fed’s monetary tightening stance and safe haven buying helped US dollar index recover after three days of losses. However, supporting gold is renewed inflation concerns post inflation data from Europe and safe haven buying amid increasing challenges for global economy. Gold may remain in a range amid countering factors however with Fed’s tightening stance still in focus, the general bias may be on the downside."

Fed Chair Jerome Powell on Tuesday pledged that the U.S. central bank would ratchet interest rates as high as needed to kill a surge in inflation that he said threatened the foundation of the economy. (With Agency Inputs)

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