Gold Rates Fall In India, Equities Crash: See Why

Indian gold rates have fallen significantly today, in line with the international trends. With an Rs. 300/10 grams drops, the 22 carat gold rate is quoted at Rs. 47100, and 24 carat gold rate is quoted at Rs. 51380 in the Indian markets. Analysts are watching this trend referring to the US Federal Reserve's recent monetary policy. The US central bank has recently raised the interest rate by 50 bps, although the markets were ready to absorb this rate hike, gold markets are marginally bearish today globally.

On the other hand, Sensex-Indian equity markets crashed today. In the backdrop of, crude oil price hike, interest rate hike by US Fed, poor employment data in the US, England's anticipation of a 10% inflation rise and rate hike by 0.25%, significant FPI outflow, repo rate hike by the RBI, the equity markets have crashed today. Indian economy is reacting similarly to the international trends; as the global economic situation is not having a great time, the Indian economy is also staying under pressure. Gold rates in India depend on global prices. Today, global gold rates have plunged marginally, reflecting the same notion in India.

Forecasting the upcoming gold rates trend, analyst Jim Wyckoff told Kitco News, "Technically, June gold futures see a downtrend is a place on the daily bar chart. Bears have the overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at last week's high of $1,935.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,800.00." Investors are looking forward to the government bond yields now, so the gold markets are expected to remain in the bearish zone for the time being.

Amit Khare, AVP- Research Commodities, Ganganagar Commodity Limited told the media, "Gold prices were posting modest gains in midday U.S. trading Thursday but the bulls are fading fast after solid early gains have been erased. The precious metals markets are being buffeted today by strong gains in the U.S. dollar index and a big spike up in U.S. Treasury yields. June gold futures were last up $5.70 at $1,874.30 and May Comex silver was last down $0.037 at $22.33 an ounce. The key outside markets today sees Nymex crude oil futures prices down and trading around $107.00 a barrel after trading above $111.00 earlier today. The U.S. dollar index is solidly higher at midday and hit a new 20-year high. The yield on the 10-year U.S. Treasury note is presently fetching 3.082%, which is a 3.5-year high. It's been quite a while since Treasury bond futures prices were down over 3 full points in a day."

Today, the Comex gold futures were quoted at $1876.10/oz, gaining by 0.02%, till last traded. Yesterday it was last quoted at $1875.70/oz. The spot gold prices are quoted at $1876.00/oz, falling by 0.10%, till last traded. On the other hand, the US dollar index in the spot market stood at 103.77, gaining by 0.19%. In India, the MCX gold in June future was quoted at Rs. 51,035 grams, gaining by 0.27%, till last traded.