Gold rates in India fall to 7-month lows


FE Team | Published: September 22, 2022 22:43:04


Gold rates in India fall to 7-month lows

NEW DELHI, Sept 22 (The Economic Times): Gold and silver prices in India fell today in tandem with a drop in international prices.
On MCX, gold futures were near 7-month lows of Rs 49,321, down 0.25 per cent while silver fell 0.4 per cent to Rs 57,059 per kg. In global markets, spot prices of gold fell 1 per cent to $1,656.97 per ounce, buffeted by a strong dollar and firm bond yields after US Federal Reserve overnight increased interest rates by another 75 basis points and signalled more hikes.
US Treasury two-year yields, which closely track the Fed rates, rose further above 4 per cent to the highest since 2007.
The dollar index rallied to a new two-decade high, making the greenback-priced metal more expensive for buyers holding other currencies.
Gold is seen as a hedge against inflation but rate hikes to tame inflation tend to raise the opportunity cost of holding zero-yield bullion. Spot silver slumped 1.7 per cent to $19.26 per ounce while platinum fell 1.1 per cent to $897.92.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities, said: "COMEX gold trades modestly lower near $1668/oz weighed down by firmness in the US dollar post Fed decision. The US dollar index jumped to fresh 2002 high as the US central bank projected possibility of another 0.75 per cent hike this year and no cut in interest rate until 2024. The US dollar is also supported by safe haven buying and no major change in monetary policy stance of other central banks. The persistent strength in the US dollar may continue to weigh on gold. However, Fed's move was well expected so market reaction may subside."
Despite the recent slide in gold prices, investors refused to jump in. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.12 per cent to 952.16 tonnes on Wednesday from 953.32 tonnes on Tuesday.

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