The gold market is, at present, setting one of the most volatile trends. The Russo-Ukraine war is not over yet, and the yellow metal has not lost its importance as a safe haven. However, gold rates are now running between $1918/oz – $1940/oz. Investors and analysts are quite uncertain about the trend of the metal’s price.
Additionally, the US FOMC is going to play an important role in deciding the price trend. Regarding gold market, Ravi Singhal, Vice President, GCL Securities Ltd commented, “Gold prices initially wiped out light losses and traded strong in view of the recently released FOMC minutes. However, there was a marginal sell-off in the prices. Many understood the FOMC. Minutes came as no surprise surprise, which allowed precious metals markets to drift higher for some time. Rising bond yields this week is a bearish element for metals markets. June’s Gold futures were down $5.00 at $1,922.60 and May Comex silver was down $0.104. $24.43/oz.” He continued, “US FOMC minutes showed that members saw a monthly draw-down of US securities (quantitative tightening) totaling $95 billion. Many members support a 50 basis point interest rate hike at the next FOMC meeting and possibly the following.” The same is true in the US. A few meetings thereafter. Members also believe that the Russo-Ukraine war has substantially heated up inflationary pressures.” With the rise in interest rates in the United States, gold rates in the global markets may fall further.
Singhal feels that the closing price of gold in June will be Rs. 51596, Support Price Range Rs. 51450 – 51200, and gold could face resistance between Rs. 51750 and Rs. 52000. Apart from the Russo-Ukraine war situation, the gold market is also dependent on the US bond yield, which is now giving a yield of 2.611%. A rise in US bond yields could push gold prices further down.
Comex gold futures were quoted at $1938.20/oz, up 0.77% as of last trade. It was last quoted yesterday at $1923.10/oz. The spot price of gold is quoted at $1925.90/oz, down 0.02% as of last trade. At the same time, the US dollar index was down 0.10% at 99.54 in the spot market. Gold price in India in June futures on MCX is Rs. 51,875 grams, a gain of only 0.54% till last trade.
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Story First published: Thursday, April 7, 2022, 23:57 [IST]