International gold markets are quite bearish at present. With the hiking inflation rate, the US Federal Reserve, the central bank of the country might decide to implement another interest rate hike, as the US Fed chair Jerome Powell has recently indicated. Since the last US Fed meeting, analysts were expecting another rate hike, Powell's indication of another 50 bps rate hike is keeping the markets volatile now.
In India, the 22 carat gold rates are quoted at Rs. 49300, and 24 carat gold rates quoted at Rs. 53780/10 grams.
Investors are expecting the US bond yield to rise further, with the rate hike. Hence, gold along with other commodities will do down. However, the US inflation rate at 8.5% YoY is concerning and gold has been playing an important role as a hedge against inflation. But now, as the Russia-Ukraine tensions are also easing, the gold rates are falling, reflecting the same trend in India.
Commenting about the rate hike, analyst David Erfle, told Kitco News, "The Fed's plan to hike interest rates by 0.50% in less than two weeks could be the final nail in the coffin for the 10-year Treasury yield to end its 40-year downtrend and start a new long-term uptrend, effectively ending a decade's long bull market in bonds. And if the 10-year U.S. Treasury yield decisively breaks above its 40-year downtrend, that could be seen as the start of a new uptrend, meaning a continued rise in interest rates and ongoing pressure on stock prices." The rate hike will eventually impact the gold markets and gold prices are anticipated to drop. The Fed will decide about the rate hike at the May 3-4 meeting.
The Comex gold futures were quoted at $1937.10/oz, falling by 0.57%, till last traded. Yesterday it was last quoted at $1948.20/oz. The spot gold prices are quoted at $1934.70/oz, falling by 0.93%, till last traded. On the other hand, the US dollar index in the spot market stood at 101.18, gaining by 0.55%. In India, the MCX gold in June future was quoted at Rs. 52,288 grams, falling by 0.24%, till last traded.