New Delhi: Gold prices were flat, fitting into a tight range on Thursday as market participants maintained a cautious stance ahead of US inflation reading that could influence the Federal Reserve’s next interest rate hike decision.
Wednesday’s readout of the central bank’s last policy meeting showed Fed policymakers agreed they needed to move to a more restrictive policy stance, and then maintain that for some time to lower inflation.
Gold futures on
were trading flat, marginally lower by 0.02 per cent or Rs 12 at Rs 50,893 per 10 grams. Similarly, silver futures were flat, almost unchanged at Rs 57,322 per kg.
Gold is considered as a hedge against inflation and economic uncertainties, rising interest rates reduce the appeal of the asset, which pays no interest.
ICICI Direct Research said that gold prices traded lower on Wednesday amid stronger than expected macroeconomic data from the US. “However, bullion prices were pressured by weakness in US 10 years treasury yields,” it said.
MCX gold prices are expected to trade with a negative bias for the day amid strong US dollar, said the brokerage firm. “Additionally, investors will keep an eye on initial jobless claims and CPI data from the US for more understanding,” it added.
Physical gold prices flipped to a discount in India last week as elevated local rates amid a dive in the rupee dampened festive demand, with higher prices playing spoilsport across other Asian hubs as well
On the physical front, Standard Chartered said in a note that with festival-wedding buying starting in India, demand would continue to firm, but was not expected to be as strong as in the fourth quarter of 2021.
In the spot market, highest purity gold was sold at Rs 50,755 per 10 grams while silver was priced at Rs 57,104 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have dropped almost Rs 1,100 per 10 grams for just five previous sessions, whereas Silver has plunged almost Rs 4,000 per kg during the same period under review.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities, said that the US Producers price print showed an increase in September indicating inflation is here to stay and might take time to cool off.
“FOMC minutes from their September meeting also indicated the Fed is committed to increasing rates to tame inflation and get back to its target level,” he said. “Gold is vulnerable to more corrective moves amid Fed’s aggressive stance,” he added.
Augmont, a homegrown gold retail platform, has forayed into the ‘sell old gold’ business to enable in simplifying the process and to offer its customers assistance in all things related to selling old gold.
It has chosen Hyderabad market as its second touch point for the Sell Old Gold process, after Zaveri Bazaar in Mumbai. It was launched on Wednesday, October 12.
Global markets
Spot gold held its ground at $1,670.20 per ounce, as of 0239 GMT. US gold futures dipped 0.1 per cent to $1,676.50.
Spot silver fell 0.6 per cent to $18.95 per ounce, platinum rose 0.1 per cent to $880.68 and palladium lost 0.1 per cent to $2,134.03.
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