Home NewsCommodities News Gold rate today: Yellow metal gains 1% as Fed lowers growth forecast; silver adds Rs 1,100

Gold rate today: Yellow metal gains 1% as Fed lowers growth forecast; silver adds Rs 1,100

by WOOWinvest
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Gold rate today: Yellow metal gains 1% as Fed lowers growth forecast; silver adds Rs 1,100

NEW DELHI: Gold prices jumped on Thursday after Fed policymakers cut their GDP forecasts for the world’s largest economy and signaled U.S. inflation at 4.3 percent in 2022, while raising interest rates for the first time since 2018.

Gold futures for April delivery on MCX traded at Rs 51,678 per 10 grams, up Rs 458 or 0.90%. But analysts expect gold to continue to fall as it is highly sensitive to rising U.S. interest rates, which increases the opportunity cost of holding non-yielding gold.

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.8% to 1,070.53 tonnes on Wednesday, the highest since March 2021

Silver futures for May delivery rose 1,170 rupees, or 1.74 percent, to 67,699 rupees a kilogram.

The Fed hinted at six rate hikes in 2022, despite Fed Chairman Jerome Powell suggesting that the “economy is very strong” to handle tightening and that the probability of a recession “is not particularly high.”

The Fed forecast inflation at 4.3%, well above a comfortable 2%, and lowered its growth forecast to 2.8% from 4%.

Trading Strategies ICICI Securities believes that gold is likely to maintain its near-term negative bias amid a firming U.S. dollar and surging U.S. Treasury yields.

“Yields are rising as the Fed said it would raise its benchmark interest rate by 25 basis points from near zero to between 0.25% and 0.5%. In addition, the Fed also hinted that a plan to reduce interest rates may be announced and implemented soon. 9 A trillion-dollar portfolio. Officials expect Fed rates to rise to at least 1.9% by the end of the year, implying a total of seven 25-percentage-point hikes, according to the FOMC economic forecast.”

The brokerage sees resistance at Rs 51,720 for gold and Rs 67,972 for silver.

Spot gold on global markets held on to $1,929.57 an ounce after hitting $1,894.70 on Wednesday, its lowest since Feb. 28. U.S. gold futures rose 1 percent to $1,928.40, according to Reuters.

Spot silver gained 0.3% to $25.13 an ounce, while platinum gained 0.7% to $1,024.32.

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