Mumbai, March 9 (IANS). On Monday, a fall in the prices of precious metals i.e. gold and silver was seen due to the strengthening of the US dollar and inflation fears, which reduced expectations of a cut in interest rates by the US Federal Reserve in the near future.
In view of the increasing tension between America, Israel and Iran, it was expected that the prices of precious metals like gold and silver would increase further. But on the contrary, there has been a decline in their prices.
On Monday, in the day’s trading on MCX, gold futures for April delivery fell to the day’s low of Rs 1,59,826 per 10 grams, while silver futures for May delivery fell to the day’s low of Rs 2,60,743 per kg.
Till the time of writing the news (around 12.18 pm), the gold contract on MCX with expiry on April 2 was seen trading at Rs 1,60,678 per 10 grams, down by Rs 881 or 0.55 percent. At the same time, on MCX, the silver contract with expiry on May 5 was trading at Rs 2,64,907 per kg with a fall of Rs 3,378 or 1.26 percent.
Meanwhile, the US dollar strengthened to a three-month high of 99.34, registering a gain of about 0.36 per cent on an intraday basis. The strengthening of the dollar makes it more expensive for investors in other currencies to buy gold and silver.
According to analysts, US Treasury bond yields have also increased and the 10-year bond yield has reached a one-month high. This increases the cost of holding non-interest bearing metals like gold and silver.
During this period, there has also been a sharp rise in the prices of crude oil. Oil prices rose nearly 27 percent to $116 a barrel, the first time since 2022 that both major oil benchmarks have gone above $100 a barrel. This rise has come due to increasing tensions in the Middle East and supply disruptions in the Strait of Hormuz.
This surge in oil prices has increased the fear of inflation, due to which there is increasing expectation in the market that the US Federal Reserve can keep the interest rates stable in the two-day policy meeting to be held on March 18.
According to market estimates, the probability of the Fed keeping interest rates unchanged in June has increased to more than 51 percent, which was less than 43 percent last week.
Analysts say that the level of Rs 1,48,000 is considered to be a strong support for gold, while the level of Rs 1,53,000 can be a resistance.
At the same time, strong buying is being seen in the international market Comex around $5,000. If prices remain stable above $5,400 to $5,600, gold can reach new record highs.
Market experts believe that despite the ups and downs, the medium and long-term outlook for silver remains positive as global geopolitical conditions and market signals are in its favor.
–IANS
DBP/