Gold rate today: Yellow trades below Rs 51,000; silver falls by Rs 180

NEW DELHI: Gold prices dropped on Thursday after red hot US inflation numbers spooked investors, stoking huge rate hike fears in the upcoming Fed policy meeting.

The Federal Reserve is seen ramping up its battle with sky-high inflation with a supersized 100 basis points rate hike at its policy meeting on July 26-27.

Gold futures on

retreated about 0.15 per cent or Rs 77 to Rs 50,725 per 10 grams. However, silver futures traded lower by 0.32 per cent or Rs 180 at Rs 56,947 per kg.

The dollar steadied close to 20-year highs, hurting demand for greenback-priced gold among buyers holding other currencies. Benchmark US 10-year treasury yields rose, weighing on the appetite for gold.

Pritam Patnaik, Head – Commodities, Axis Securities said gold prices witnessed extreme volatility thanks to the red-hot US inflation date, the highest in the last 40 years.

“It is almost certain that the Fed could raise interest rates by as much as 75 to 100 basis points in its next meeting,” he added. “This clearly spooked the broader markets and led to the collapse of gold prices. The volatility may continue.”

In the spot market, the highest purity gold was sold at Rs 50,800 per 10 grams while silver was priced at Rs 56,074 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.

The spot prices of gold have plunged more than Rs 1,500 in the last seven trading sessions, whereas silver has plunged about Rs 2,100 per kg in the same period of review.

Rahul Kalantri, VP Commodities, Mehta Equities said gold prices hit 11-month lows and silver prices also hit two-year lows after the US inflation surged to 41-year highs.

Trading Strategy
“We expect gold prices to trade sideways to up for the day with COMEX Spot gold support at $1,720 and resistance at $1,745 per ounce. MCX Gold August support lies at Rs 50,500 and resistance at Rs 51,100 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),

Securities.

Global markets
Global markets too swung wildly in the previous session. Spot gold fell 0.2 per cent to $1,731.19 per ounce by 0312 GMT. US gold futures dropped 0.5 per cent to $1,727.30.

Spot silver fell 0.3 per cent to $19.11 per ounce, platinum slipped 0.7 per cent to $849.00, and palladium firmed 0.2 per cent to $1,978.20.

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