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Business News/ News / India/  Gold rates today fall to lowest in 3 months, down 1,500 in a week

Gold rates today fall to lowest in 3 months, down ₹1,500 in a week

Gold and silver rates today: After recent correction, the precious metal is down about ₹6,000 from March highs while silver has also fallen sharply

Gold and silver prices today: On MCX, gold struggled near ₹50,000 per 10 gram while silver at around ₹58,000 per kg. (REUTERS)Premium
Gold and silver prices today: On MCX, gold struggled near 50,000 per 10 gram while silver at around 58,000 per kg. (REUTERS)

Gold prices edged lower in Indian markets after a sharp drop in the previous session. On MCX, gold futures were down 0.03% to 50,158 per 10 gram while silver rose 0.3% to 58,920 per kg.  In the previous session gold had dropped 1.2% while silver slumped 2,000 or 3.3%. So far this week, gold prices are down about 1,500 per 10 gram. The recent correction in gold has nearly wiped out gains from a rally driven by safe-haven demand after Russia's invasion of Ukraine in February. In early March, gold had risen closer to 56,000 levels. 

In global markets, gold prices hovered near three-month lows as the strength in US dollar continued put pressure on the demand for greenback-priced bullion. Spot gold was down 0.1% at $1,820.54 per ounce. Among other precious metals, spot silver was up 0.5% at $20.76 per ounce while platinum gained 0.8% to $951.50, and palladium rose 1.4% to $1,934.36.

Pritam Patnaik, Head - Commodities, HNI & NRI Acquisitions, Axis Securities, said: “The fall in gold prices can be directly attributed to the dollar index hitting its 20-year high of 104.95 yesterday. Gold is clearly losing its safe-haven store value to a surging dollar. Ideally, a recessionary economic trend, ratcheting up of the geopolitical situation in the Russian - Ukrainian war, with Russia warning of more destructive measures for aspirant NATO members, Finland and Sweden, and a softer bond markets, should have greatly helped gold bulls' cause, but the exact reverse has taken place."

“This could be because the flash correction in the global equity markets has drained liquidity, leading to selling orders across all asset classes. Additionally, the risk premium is fairly entrenched with the US dollar, putting further pressure on gold prices. We are in for another volatile session, with a negative bias," he added. 

Gold is also sensitive to US short-term interest rates and bond yields. Last week, the US central bank hiked its benchmark overnight interest rate by an aggressive half-a-percentage point.

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Published: 13 May 2022, 09:07 AM IST
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