NEW DELHI: Gold prices tanked on Thursday, bucking the global cues, as the Federal Reserve’s commentary spooked the bullion market. The yellow metal was trading near recent lows.

The Federal Reserve decided on March rate hikes that pushed up US Treasury yields and the dollar, while uncertainty over Ukraine capped bullion’s losses.

Gold futures on MCX tanked 1.14 per cent or Rs 558 to Rs 48,293 per 10 grams. Silver futures too dropped by 1.19 per cent or Rs 764 at Rs 63,307 per kg.

Gold is generally seen as an inflationary hedge, but it is highly sensitive to rising US interest rates, which increases the opportunity cost of holding non-interest bearing bullion.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities said that gold has weakened as US dollar and bond yields edged up post Fed decision.

“Fed kept monetary policy unchanged as expected but Fed Chairman Powell indicated the possibility of a rate hike at the March meeting. Gold may remain under pressure on Fed’s hawkish stance,” he added.

In the spot market, the highest purity gold was sold at Rs 48,861 per 10 grams while silver was priced at Rs 63,712 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have gained over Rs 830 in the nine sessions, whereas Silver has jumped about Rs 3,300 per kg since January 10.

Global markets
Spot gold was unchanged at $1,817.29 per ounce by 0117 GMT, hovering near a one-week low of $1,814.51. US gold futures fell 0.7 per cent to $1,817.20.

Spot silver shed 0.4 per cent to $23.40 an ounce. Platinum fell 0.5 per cent to $1,026.50 and palladium remained unchanged at $2,327.55.