Gold prices are experiencing downward pressure, despite the recent decision by the US Federal Reserve to pause interest rate hikes. The price of gold futures for October 2023 on the Multi Commodity Exchange (MCX) opened lower at ₹59,315 per 10 grams and quickly reached an intraday low of ₹59,004 within minutes of the commodity market’s opening.
In the international market, the price of gold is hovering around $1,928 per ounce. Similarly, silver prices today opened lower at ₹72,970 per kilogram on MCX and further declined to hit an intraday low of ₹72,195 shortly after the market’s opening bell. In the international market, silver prices are currently oscillating around $23.16 per ounce.
The selling pressure on gold and silver comes in the wake of a hawkish stance by the US Federal Reserve during its recent meeting. While the central bank opted to keep interest rates unchanged, it raised the median interest rate projection from 4.60% to 5.10%. This indicates that there may not be any rate cuts in the near future, including after the November and December meetings later this year.
Furthermore, the global gold ETF market is not sending positive signals for gold prices in the short term. Profit booking in the gold ETF market is contributing to the downward pressure on gold prices. Analysts suggest that this trend is likely to persist in the short to medium term.
Over the next two to three months, gold prices are expected to remain range-bound, fluctuating between $1,880 and $1,980 per ounce. However, demand in the domestic market during the upcoming festive season is anticipated to provide some support and limit the downside movement in precious metals. Additionally, international demand is expected to surge from November to February, further mitigating downside risks.
Despite the current challenges, experts advise maintaining a buy on dips strategy for gold and other bullion investments, as the precious metals market remains attractive for investors in the longer term.
Commodities Desk
