On Wednesday, gold futures began trading on the Multi Commodity Exchange (MCX) at Rs 59,315 per 10 grammes and fell as low as Rs 55,904 during the day. Prices on the world market were roughly $1,931.85 per troy ounce. On the MCX, silver opened at Rs 72,970 per kg and fell as low as Rs 72,195 during the day. On the international market, the cost per troy ounce was roughly $23.20.
According to Anuj Gupta, Head of Commodity and Currency at HDFC Securities, gold prices concluded on a good note yesterday, up by 0.21% and closing at 59405 as a result of demand against market uncertainties worldwide.
“FOMC maintained interest, but suggested one more raise this year. In India, there are a lot of new investors buying gold ETFs, which is beneficial for the metal. The Dollar Index touched a one-week high to retake the 105 barrier, which presented Gold with its most recent assault. On the global market, gold is currently trading at $1926 per ounce. When traded, gold may fluctuate between $1920 and $1940, and on the MCX, it may fluctuate between 58800 and 59300.
“Traders positioned for a Federal Reserve signal of a pause in its rate hike campaign, pushed gold prices up in the vicinity of $1950; however, a hawkish FOMC monetary policy outcome and commentary sent the metal tumbling from its day’s high of $1947,” said Praveen Singh, Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas. The closing price of gold was $1931.
Markets will be paying careful attention to the Bank of England’s decision about monetary policy today. The Sterling Pound will come under more pressure if there is a dovish 25 bps raise.
As rates and the dollar climb due to the robust US economy, gold is at risk due to its inflated valuation.
After the Federal Reserve signalled another rate hike this year and a stricter monetary policy through 2024 than anticipated, the gold price fell as the U.S. currency and bond yields soared.
“The U.S. dollar index climbed 0.4% to its highest level since March 2023, while two-year Treasury yields rose to a 17-year high after the Fed raised rate hike expectations,” said Manav Modi, Analyst, Commodity and Currency, MOFSL. The Fed outlined a harsher policy course going forward in the fight against inflation,
The Federal Reserve cut its core inflation prediction for this year from 3.9% to 3.7%. Forecasted growth year over year dramatically rose to 2.1% from 1% this year. The likelihood chart from CME Fed-Watch tool continues to indicate more than 70% probability for a halt in the November Fed meeting, even after a hawkish pause.
“Later in the day, the Bank of England will announce whether it is stopping a string of interest rate increases that dates back to December 2021 or continue on its course of rate hikes.