Gold prices remain volatile after US Fed rate hike, US GDP data. Buy or wait?
jobless claim data. Gold future contract for August expiry on Multi Commodity Exchange (MCX) ended ₹440 per 10 gm higher on Friday and finished at ₹59,390 levels. In international market, gold price closed 0.69 per cent higher on Friday and ended at $1,959 per ounce levels.
Silver rates too remained volatile after the US Fed rate hike and strong economic data release in the week gone by. Silver price on MCX ended ₹ ₹293 per kg higher at ₹74,040 levels on Friday. In international market, silver rates today is at $24.335 per ounce levels.
Speaking on the reason highly volatile bullion market, Sugandha Sachdeva, Executive Director & Chief Strategist at Acme Investment Advisors said, "Gold prices remained highly volatile during an eventful week, where significant data releases coincided with the monetary policy meetings of the US Fed, ECB, and BOJ. The key highlight was the US Fed's decision to raise interest rates by 25 bps to 5.25–5.50%, on expected lines. However, the Fed chair's speech was mixed, indicating a likelihood of at least one more rate hike, but also emphasizing a data-dependent approach.
This was perceived as neither overly hawkish nor dovish by the market participants and gold prices remained supported." Sugandha said that precious metal prices witnessed sharp volatility following the ECB's decision to raise interest rates by 25 bps, while maintaining a dovish stance and the release of stronger-than-expected US Q2 GDP data (advance estimate), leading to a rebound in the dollar index and downward pressure on gold prices. "The strong US GDP data suggested that any recession is currently not on the horizon. The data revealed that the US economy grew faster than anticipated in the second quarter, supported by the
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