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NEW DELHI: Gold prices tumbled on Thursday, to hit nearly their lowest in a year ahead of rake hike prospects by major central banks.
The European Central Bank is set to raise interest rates for the first time in 11 years on Thursday, with a bigger-than-expected move seen as increasingly likely as policymakers fear losing control of runaway consumer price growth.
Gold futures on
were trading lower by about 0.49 per cent or Rs 248 at Rs 49,977 per 10 grams. Silver futures plunged by 0.89 per cent or Rs 496 at Rs 55,123 per kg.
Although gold is seen as a hedge against inflation, rising interest rates increase the opportunity cost of holding bullion, which pays no interest. Market participants are also keeping a close watch on the resumption of gas flow along the biggest pipeline from Russia to Germany.
Pritam Patnaik, Head – Commodities, Axis Securities said gold prices have come under renewed attack as the dollar index tried to retest its recent highs. “Prices will remain soft to negative as all rallies will be possibly sold into.”
The investors seem to be nervous about the deluge of impending rate hikes across all major economies, he added.
In the spot market, the highest purity gold was sold at Rs 50,553 per 10 grams while silver was priced at Rs 55,367 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have tumbled more than Rs 1,750 per 10 grams in the last two weeks, whereas silver has plunged about Rs 2,800 per kg in just one session.
Trading Strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,685 per ounce and resistance at $1,710 per ounce. MCX Gold August support lies at Rs 49,800 and resistance at Rs 50,500 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
securities.
Global markets
Spot gold was down 0.3 per cent at $1,691.84 per ounce after falling to its lowest since early August 2021 at $1,689.40 earlier in the session. US gold futures fell 0.6 per cent to $1,690.40 per ounce.
Elsewhere, spot silver fell 0.6 per cent to $18.54 per ounce, platinum dipped 0.5 per cent to $854.03, and palladium rose 0.3 per cent to $1,867.20.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)