Home NewsCommodities News Gold rate today: Yellow metal drops below Rs 50,000; silver also declines

Gold rate today: Yellow metal drops below Rs 50,000; silver also declines

by WOOWinvest
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Gold rate today: Yellow metal drops below Rs 50,000; silver also declines


New Delhi: Gold prices fell sharply on Wednesday after rising U.S. Treasury yields and cautiously positive comments from Federal Reserve Chairman Jerome Powell. However, the U.S. dollar index fell to a two-week low, boosting gold’s appeal. Investors trimmed bets on whether higher U.S. interest rates would push the dollar higher.

Gold Futures

It was trading down 0.56 percent or 283 rupees at 49,890 rupees per 10 grams. However, silver futures were down around 0.87% or 584 rupees at 60,622 rupees a kilo.

A weaker dollar makes gold more attractive to buyers of other currencies. Gold is seen as a safe haven and a hedge against inflation during economic crises.

Asian shares edged higher despite the data reinforcing investor concerns that the global economic recovery may be more fragile than expected, although inflationary pressures remain high.

Ravindra Rao, vice president of commodities research at Kotak Securities, CMT, EPAT, said the recent pause in the decline in the dollar index following hawkish comments from Federal Reserve Chairman Jerome Powell weighed on gold trading.

“The outflow of ETFs also points to continued investor outflows. However, underpinning prices are growth concerns, inflation concerns and ongoing Russia-Ukraine tensions,” he added.

In the spot market, gold of the highest purity sold at Rs 50,593 per 10 grams on Tuesday, while silver was sold at Rs 61,302 per kilo, according to the Gold and Silver Jewellers Association of India.

Gold spot prices remained below Rs 51,000 for the third consecutive session, while silver fell by around Rs 2,200/kg in just one session in the spot market.

Ravi Singh, vice president and head of research at ShareIndia, said the global economy was in focus after weak economic data from China highlighted concerns about the prospect of a global economic slowdown, with the dollar index weakening, pushing gold prices higher.

“However, U.S. Treasury yields have climbed, limiting demand for gold. Gold prices are likely to remain sideways this week,” he added.

Trading strategy “We expect gold to trade sideways on the day with COMEX spot gold support at $1,790 and resistance at $1,830 an ounce. MCX Gold Gold June support at Rs 49,800 and resistance at Rs 50,600 per 10 grams,” Tapan Patel , Senior Analyst (Commodities),

securities.

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