Gold rate today: Why is gold price nosediving today after US Fed meeting?
Gold rate today: On account of hawkish US Fed on interest rate fueling US dollar rates, gold price today witnessed a sharp fall in the early morning session. Gold futures contract on the Multi Commodity Exchange (MCX) for August 2024 expiry opened with a downside gap at ₹71,475 per 10 gm and touched an intraday low of ₹71,401 within a few minutes of the opening bell.
In the international market, the spot gold price oscillates around $2,315 per ounce, whereas the Comex gold price is around $2,330 per troy-ounce mark.Gold prices, as per the insights of our esteemed commodity market experts, are currently under pressure due to the hawkish US Fed's interest rates. They have observed that while the US Fed has maintained the status quo on interest rates, its commentary is hawkish on rate cuts in 2024.
This shift, from initially announcing three rate cuts to just one, has led to an increase in US dollar rates and Treasury yields, thereby impacting gold prices.When we delve into the reasons behind the global decline in gold prices, Anuj Gupta, the Head of Commodity & Currency at HDFC Securities, provides a clear explanation. He points out, "The drop in gold prices today is a direct result of the US Federal Reserve's meeting outcome.
The Fed had initially announced three rate cuts in 2024, but in their recent commentary, they have revised this to just one. This change has led to an increase in US dollar rates and Treasury yields, causing gold prices to fall." This direct correlation between the US Fed's decisions and gold prices is crucial to understand the market dynamics.Also Read: Why is Anil Ambani-owned Reliance Power share price skyrocketing?Dhawal Ghanshyam Dhanani, Fund Manager at SAMCO Mutual Fund, said, "The US Fed
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