Gold rate today: Will US Fed rate hike fear spoil festival rally?
Gold rate today: On account of US dollar gaining against major global currencies after US Fed's hawkish rate pause in the meeting held last week, gold prices have remained under pressure and it has been trading in $1,920 to $1,980 per ounce range. However, on Friday, the precious metal ended close to its support of $1,920 triggering speculations abour further downside movement in the bullion metals. As festival season is fast approaching in India, bets are high whether the renewed US Fed's rate hike fear would spoil festival rally in gold and silver prices.
According to commodity market experts, US Federal Reserve has kept the interest rate unchanged but it has raised the median rates from 4.60 per cent to 5.10 per cent, triggering lower chances of rate cut in short to medium term. This has helped US dollar to gain strength against major global currencies. In fact, dollar index has climbed to six-month high whereas US dollar has hit 11-month high against Indian National Rupee (INR).
They said that gold prices are expected to remain range-bound in near term as US Fed has already declared that it would be increasing interest rate one more time in 2023. However, they said that one should maintain buy on dips as chances of downside in gold and silver prices are limited and underperformance in China may bottom out and metal prices may pick up momentum ahead of festival season in India. Speaking on the reasons that put gold prices under pressure, Anuj Gupta, Head — Commodity and Currency at HDFC Securities said, "Gold prices came under pressure after renewed fear of US Fed rate hike last week.
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