Indian gold rates are marginally bearish today, in line with the international trend. The 22 carat gold rates are quoted at Rs. 49,000, and 24 carat gold rates quoted at Rs. 53,450/10 grams, falling by Rs. 300 and Rs. 330/10 grams, respectively.
Recently, US Federal Reserve Chair Powell mentioned, "Inflation is much higher now and our policy rate is still more accommodative than it was then so it is appropriate, in my view, to be moving a little bit more quickly." So, investors are now expecting an interest rate hike by the US Fed, in its next meeting, in the first week of May. This will eventually impact the equity markets along with the commodity markets. The US Bond yield is expected to rise, on the other hand, dragging down the gold rates in the international markets. US Fed can initiate a 50 bps rate hike, earlier the Fed initiated a 25 bps rate hike. However, at that time, this step did not make any long-term impact on the gold markets.
Gold rates were gaining in the recent period as the US inflation rate surged 8.5% YoY and the yellow metal has played its card as a hedge against inflation. But a rate hike to control the inflation rate can change the situation for gold markets.
On this matter, Phil Streible, chief market strategist at Blue Line Futures told Kitco News, "We're at about 9.96 25-basis point hikes by the end of the year, so that is definitely going to put some pressure on the market. "I think in the long run, what happens is the Fed will over-tighten right off the gate, they'll create kind of panic in U.S. equities, and then from that point, you'll start to see [inflation] level off."
The Comex gold futures were quoted at $1932.50/oz, falling by 0.80%, till last traded. Yesterday it was last quoted at $1948.20/oz. The spot gold prices are quoted at $1933.30/oz, falling by 1.00%, till last traded. On the other hand, the US dollar index in the spot market stood at 101.14. In India, the MCX gold in June future was quoted at Rs. 52,264 grams, falling by 0.28%, till last traded.