The US central bank on Wednesday raised rates by three-quarters of a percentage point for the second straight meeting to combat soaring inflation.
Gold futures on
were trading higher by 0.53 per cent or Rs 267 at Rs 50,987 per 10 grams. However, silver futures soared more than 2 per cent or Rs 1,130 at Rs 55,974 per kg.
The dollar slipped for a fourth straight session, down 0.2 per cent against its rivals, making gold less expensive for buyers holding other currencies. Rising interest rates increase the opportunity cost of holding non-yielding bullion.
Pritam Patnaik, Head – Commodities, Axis Securities said that the US Federal Reserve hiked up its benchmark overnight interest rate by 75 basis points in an effort to bring down the burning inflation under control.
“The outcome of the meet was widely in expected lines. The Fed also indicated that the central bank could slow the pace and size of future rate hikes if the economy cools,” he added.
In the spot market, highest purity gold was sold at Rs 50,842 per 10 grams while silver was priced at Rs 54,840 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 900 per 10 grams in the last one week, whereas silver has rallied about Rs 950 per kg in the same period under review.
A sharp fall in purchases by investors pulled global gold demand down 8% in the second quarter compared to the same period in 2021, the World Gold Council said.
The Fed raised interest rates in line with the expectation that takes the cumulative June-July increase to 150 basis points, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“The gold prices will remain in the positive zone this week amid higher inflation and growth fear due to the steepest rate hike,” he added.
“We expect gold prices to trade sideways to up with COMEX spot gold support at $1,720 and resistance at $1,750 per ounce. MCX Gold August support lies at Rs 50,500 and resistance at Rs 51,300 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Spot gold was up 0.2 per cent at $1,737.44 per ounce, as of 0205 GMT, after rising 1 per cent to a two-week high in the previous session. US gold futures rose 1 per cent to $1,736.70 per ounce.
Elsewhere, spot silver gained 0.4 per cent to $19.20 per ounce, platinum rose 0.4 per cent to $890, and palladium climbed 0.6 per cent to $2,042.51.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)