Gold Rates In India Expected To Fall Further, As US Employment Improves

Gold rates in the global markets are expected to fall further, as the US workers applying for first-time unemployment benefits have dropped to a 52-year low. It is a positive tone for the social and economic development of the US. However, it is certainly an unsupportive atmosphere for the gold markets.

According to a report by the US Labor Department, weekly jobless claims dropped by 43,000 to 1,84,000, which is down from the last week's revised estimate of 2,27,000 claims. Significantly, "This is the lowest level for initial claims since September 6, 1969, when it was 1,82,000," the report added. The US Fed's monetary policies of ultra-accommodative stance have helped the employment situation to improve.

In November, gold prices gained significantly in the market, because of high inflation concerns. But, in December 2021, the gold rates trend reversed sharply. Earlier, bullish analysts expected the metal's prices were expected to cross $1850/oz, and cross $1950/oz in the next year. But the prices are barely staying around $1780/oz.

Gold rates in the global markets are dependent on economic growth, employment scenario, interest rates fixed by the central banks, and government bond yields. With an improving economic condition, prices of precious metal tend to fall; similarly, when the economic growth loses pace, metal prices will gain. As an example, the year 2020 can be assessed.

The pandemic was at its peak, in the last year, and the gold rates went to historical highs of around $2000/oz. But this year, in December global economic situation started to recover with improved employment scenarios and the manufacturing sector's growth. Investors are also showing better risk appetite, amid inflation worries. Analysts are also keeping faith in US Fed Chairman Jerome Powell, who has recently been reappointed by the US President. He is expected to be hawkish against inflation, as he said. So, gold rates can fall further this year. On December 9, Comex gold rates dropped 0.32% and were quoted at $1777.7/oz, till last traded.

(Also read: Indian Gold Rates Quoted At Rs. 46,840, On December 9, International Gold Rates Getting Static)

Indian gold rates are completely dependent on international gold prices. As global gold rates are expected to fall further, Indian rates will also be impacted similarly. Now, 22 carat gold rates are quoted at Rs. 46,840, and 24 carat gold rates are quoted at 47,840/10 grams, in India.