Retain inflation at a 40 years high range is the major key driver of the gold markets now. With surging inflation, gold rates generally drop, while with inflation control measures, the precious metal's prices stay under pressure. Recently, commenting on that, US Fed Chair Jerome Powell mentioned, "This year, we see an economy where the labor market is recovering rapidly and inflation is well above 2%. This tells us is that the economy no longer needs or wants the highly accommodative policies we had in place to deal with the pandemic. But it is a long way to normal." Hence the gold market is on the verge of rising.
However, the Fed Chair added, "If inflation does become too persistent, that will lead to much tighter monetary policy and that could lead to a recession," as expected earlier. USA's employment scenario is another reason the international gold market is reacting very positively this week. 'Achieving maximum employment is the USA's authority's key concern now. But the inflation pressure is negatively impacting the employment scenario in the country now. Anticipating it as a threat to the economy, the assets' prices are gaining now. Price stability is much needed now, according to the officials.
As Powell mentioned earlier, "There's high demand for goods. Shifts in demand and a return of greater supply will help to realign these. We will get a return to normal supply conditions during the course of this year." The high inflation rate is a result of the supply-chain bottleneck in the US. A demand and supply gap is triggering the inflation to gain each month, he thinks. As a hedge against inflation, the gold rates are also gaining globally.
Indian gold rates prices are dependent on international markets because India mostly imports gold from foreign markets. So surging gold rates will impact Indian gold rates positively. However, this might affect the demand further. Today, on January 17, 2022, the 22 carat gold prices are quoted at Rs. 47,090/10 grams and 24 carat gold rates are quoted at Rs. 49,090/10 grams, same as the earlier day.
Gold rates are quoted differently, daily. Today's gold rates in major Indian cities follow:
|City||22 carat (INR/10 Grams)||24 carat (INR/10 Grams)|
The Comex gold futures surged by 0.20% and were quoted at $1820.1/oz, till last traded. On the earlier day, Comex gold futures closed at $1816.5/oz. The spot gold prices were quoted at $1821.20/oz, gaining by 0.12%, till last traded. The US dollar index in the spot market stood at 95.25, surged only by 0.07%.