Gold Rate Marginally Bearish: Russia Intends To Link Ruble Directly To Gold Rate

Gold prices in the global markets are bearish today, from yesterday's last traded range, reflecting the same trend in the Indian markets. Today, Indian gold rates reduced marginally. The 22 carat gold rates are quoted at Rs. 47,750/10 grams falling by Rs. 200, while the 24 carat gold rates are quoted at Rs. 52,100/10 grams, falling by Rs. 210.

Importantly, in the present situation, the US Bond yield is surging now. This gain is eventually keeping the gold prices under pressure globally. As a 25 bps hike in the interest rate took place by the US Federal Reserve, US Bonds became more profitable. Significantly, crude oil prices globally are also falling marginally now. Additionally, investors are expecting another 50 bps interest rate hike at the May FOMC meeting, by the US Fed, which is leading them to think that gold rates can fall marginally at that time. So, they are now being interested in US bonds.

However, the global gold markets stood quite bullish for one month due to the Russia-Ukraine war, and the precious metal has proven its importance as an investment when the global politics and economy is going through a crisis. After giving above 10% returns in the past 1 year recently, now analysts and advisers are highly recommending investors to have at least 15-20% portfolio in gold. Now, gold prices have plunged marginally, which is making it a good time to buy. It will not be very wise to think that gold prices can fall sharply in the very near term, keeping in mind the Russia-Ukraine war is not yet over. So, investors should consider gold ETFs or RBI SGB for profitable gold investment.

Additionally, the latest reports informed that the Russian central bank is planning to pay a fixed rate of 5,000 roubles ($52) for 1 gram of gold, between March 28 and June 30. It will be below the present market value which is around $68. The Russian central bank additionally said 'the resumption in buying will ensure supply and uninterrupted production of local gold'. Commenting on that, Gainesville Coins precious metals expert Everett Millman told Kitco News, "Russia's intention would be for the value of the ruble to be linked directly to the value of gold. Setting a fixed price for rubles per gram of gold seems to be the intention. That's pretty important when it comes to how Russia could seek funding and manage its central bank financing outside of the US dollar system."

Today, the Comex gold futures were quoted at $1924.40/oz, falling by 1.04%, till last traded. Yesterday it was last quoted at $1944.70/oz. The spot gold prices are quoted at $1921.50/oz, fell by 0.11%, till last traded. On the other hand, the US dollar index in the spot market stood at 98.94, gaining marginally by 0.15%. In India, the MCX gold in April future was quoted at Rs. 51,169 grams, falling by 0.78%, till last traded.