U.S. Federal Reserve officials halted growing volatility in global markets on Monday and said their top priority remained controlling inflation.
Gold futures on
were trading slightly higher by 0.14% or Rs 70 to Rs 49,220 for 10 grams. However, silver futures were flat, up just 0.09% or Rs 51 to Rs 55,403 per kg.
Gold prices are down more than 20% since breaking above the key $2,000 level in March as rapid US rate hikes made non-performing bullion less attractive and also pushed the dollar higher. to multi-year highs.
Gold is seen as a hedge against inflation, rising interest rates increase the opportunity cost of holding the non-earning asset and strengthen the dollar, in which bullion is valued.
Russian President Vladimir Putin’s decision to mobilize more troops on the Ukraine conflict has drawn investors to this safe-haven asset, ICICIDirect Research said.
“Bullion prices were supported as an interest rate hike by the US Fed raised fears of a possible recession,” he added. “However, a sharp rise in the US dollar index and 10-year US Treasury yields limited the upside.”
Gold premiums in top consumer China climbed last week, helped by strong demand for bullion, while prices in India traded at a discount for the first time in four weeks due to a rise. domestic rates.
In the spot market, the highest purity gold was sold at Rs 49,590 per 10 grams while silver was priced at Rs 55,374 per kg on Monday, according to the Indian Bullion and Jewelers Association.
Spot gold prices have plunged nearly Rs 1,300 per 10 grams in the past two weeks, while silver has plunged around Rs 1,900 per kg almost in the same period under review .
“The strength of the U.S. dollar and treasury yields make the non-performing asset less attractive. Higher interest rates dampen the appeal of bullion since the metal earns no interest,” said Ravi Singh, vice -President and Head of Research at ShareIndia.
Gold could stay sideways until a new trigger sends prices higher, he added.
Global Markets
Spot gold rose 0.4% to $1,628.78 an ounce, as of 0315 GMT, after hitting its lowest level since April 2020 at $1,620.20 on Monday. US gold futures edged up 0.2% to $1,636.30.
Spot silver rose 0.6% to $18.45 an ounce, platinum fell 0.2% to $850.46 and palladium fell 0.1% to 2,044.99 $.
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