Gold Prices Decline by Rs 300, Reaching a 2-Month Low in India Amid US Federal Reserve Concerns.

Rajesh
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Discover why gold prices in India have fallen by Rs 300, reaching a 2-month low, due to concerns over US Federal Reserve actions. Understand the impact of interest rates on gold rates and explore expert insights on the future stability of gold prices. Stay informed about key data points influencing the market and the potential for gold to rebound.

Gold Price Down 300

The price of gold in India has experienced a decline of Rs 300 due to reports suggesting that the US Federal Reserve is considering two more interest rate hikes within this year. The international market witnessed a drop in gold prices to $1945 per ounce, consequently impacting prices in India. As interest rates play a significant role in determining gold rates, any indication of a rise tends to affect the value of this precious metal. Consequently, spot gold in the Indian market saw a decrease of Rs 300, settling at Rs 5470 for 22k gold. In Mumbai, 24k gold was trading at Rs 5967 per gram. Furthermore, in Chennai, 22k gold was valued at Rs 5505 per gram, while in Bangalore, spot gold was priced at Rs 5475 per gram.

Colin Shah, the Managing Director of Kama Jewelry, stated that gold prices exhibited mixed trends until the Federal Reserve announced its monetary policy on Wednesday. While the decision to maintain rates came as no surprise, the accompanying commentary indicated a likelihood of at least two more rate hikes in the current cycle. As a result, the dollar index approached the 103 level, making gold purchase more expensive.

The international market has observed gold prices reaching a 3-month low, with the domestic market also experiencing a 2-month low. Nevertheless, gold has yielded a return of over 7% year-to-date in INR terms. Moving forward, we anticipate stability in gold prices, and any mild or severe recession in the US may prompt the Federal Reserve to adopt a more lenient stance, thereby pushing gold prices higher. Colin Shah, Managing Director of Kama Jewelry, commented on the decline in gold prices, stating, "Gold prices hitting a 3-month low are likely to find support at $1,930 in the international market and INR 58,500 in the domestic market."

In the future, it is expected that gold will continue to be influenced by data originating from the US, including payrolls data and consumer price inflation data. These factors will serve as key indicators for the Federal Reserve's future actions.

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