Gold prices in India fell sharply today in view of the weakness in global rates. Gold on MCX fell 0.7% to near two-month low 51,186. Gold falls at day’s low 51,086. Silver down 0.2% 64,821 per kg. In the international markets, gold fell to $1,881.45 today, the lowest level since February 24. The precious metal was down 0.8% at $1,889.84 an ounce in fresh trade. Among other metals, spot silver fell 0.3% to $23.42 an ounce.
Analysts attribute the rise in the US dollar to the recent fall in gold prices. The dollar rose on hopes of an aggressive monetary policy tightening by the US Federal Reserve. The dollar index rose to its highest level since January 2017 on hopes that the US central bank would be more aggressive than peers.
Sleep Analysts say it has found support near $1880 per troy ounce and silver near $23.00.
“There is growing concern about the demand for raw materials as the cases of Kovid in China are spreading rapidly across the country. While the war between Russia and Ukraine and global inflation continues to worsen, market participants are now increasingly focused on rising yields in US debt instruments such as bonds and Treasuries, reducing the luster of gold and silver. ,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
Gold has support in rupee terms 51,140–50,920, while resistance is at 51,780–52,050. support for silver 64,620- 64,410 while resistance is at 65,690-66,070,” he said.
Concerns about slowing growth in China and Europe also boosted the safe-haven appeal of the US dollar. The greenback is also seen as a safe-haven asset to rival gold during economic and political crises. The US Fed is expected to increase rates by 50 basis points in its May 3-4 policy meeting. Rising interest rates also increase the opportunity cost of holding non-yielding gold, as well as boost the dollar in which it is valued.
“Weights on gold price Fed’s tough stance and continued strength in US dollar. ETF investors have also gone sideways. However, support prices came amid mixed economic data from major economies and China’s struggle to bring the virus under control. Russia-Ukraine tensions and global growth are increasing concerns. Gold has closed near $1,900 an ounce level after a recent selloff and mixed factors may keep prices in a range, we see rising risks to the global economy. We expect to see some corrections in the coming months,” said Ravindra Rao, VP- Head Commodity Research, Kotak Securities. ,