Gold, Silver Prices Fall In Bangalore Even When Fed Hints At Sept Rate Cut; 24K, 22K, 18K Dips By Rs 24-3,300

Gold and silver prices declined sharply in Bangalore on August 22, despite the majority of US Federal Reserve officials agreeing to cut key interest rates by September policy as per the latest FOMC minutes. In the global market, spot gold and US gold futures also slipped after recovering in the previous session. Precious metals are well-placed as the dollar index is near to seven-and-half month low. In the silicon valley, 24K, 22K, and 18K gold prices dipped in the range of Rs 24 to Rs 3,300. The drop in silver prices was at a slower pace with 1kg of this precious metal coming below the Rs 85,000 mark, and the cheapest silver is priced at Rs 84.90.

In the FOMC minutes for the July 30-31, 2024 meeting, Fed officials noted that policy expectations, however, measured, pointed to a first-rate cut at the September FOMC meeting, at least one more cut later in the year, and further policy easing next year.

That means there is room for more than one rate cut in 2024 by the Fed. Lowering interest rates makes non-yielding assets like gold attractive.

While the majority of FOMC opted for keeping the target range for the federal funds rate at 5-1/4 to 5-1/2 per cent in July policy, several of them also believed that there is a plausible case for reducing the target range 25 basis points. Hence, a 25 bps rate cut can be expected in September.

Rahul Kalantri, VP of Commodities, Mehta Equities said, "Gold and silver traded steadily, ending on a mixed note, as the majority of Federal Reserve members agreed on the possibility of cutting interest rates in the upcoming policy meetings. The FOMC meeting minutes indicated that recent progress on inflation, coupled with a rise in unemployment, is creating room for a 25 basis point rate cut in the next meetings."

Kalantri added that market sentiment already reflects a 100% expectation of this rate cut. The dollar index, trading at 7½-month lows, is bolstering precious metal prices. Following the FOMC meeting minutes, gold and silver prices recovered from the day's lows and maintained their bullish momentum.

Gold Prices In Bangalore On August 22:

24K gold price in Bangalore dipped by Rs 3,300 to Rs 7,28,700 in 100 grams, while 10 grams slipped below Rs 73,000 to Rs 72,870 down by Rs 330 from the previous day. Further, 8 grams and 1 gram of 24K also fell by Rs 264 and Rs 33 to Rs 58,296 and Rs 7,287 respectively.

Further, prices fell by Rs 3,000 in 22K of 100 grams to Rs 6,68,000. Additionally, 10 grams of the same carat was down by Rs 300 to Rs 66,800 on August 22, followed by 8 grams of gold that fell by Rs 240 to Rs 53,440. The cheapest gold of 22K which is 1 gram is down by Rs 30 to Rs 6,680.

Coming to the lowest carat, 18K, gold prices shed Rs 2,400 on August 22 to Rs 5,46,600 in 100 grams, followed by 10 grams price which is down by Rs 240 to Rs 54,660. Additionally, 8 grams and 1 gram of gold edged lower by Rs 192 and Rs 24 to Rs 43,728 and Rs 5,466 respectively.

Silver Prices In Bangalore:

1Kg silver price in Bangalore stores is down by Rs 100 to Rs 84,900. Further, 100 grams and 10 grams of silver dipped by Rs 10 and Rs 1 to Rs 8,490 and Rs 849. Meanwhile, 8-gram silver is down by Rs 0.80 to Rs 679.20, and 1-gram is down by Rs 0.10 to Rs 84.90.

MCX Gold, Silver Prices:

At MCX, gold futures with an expiry of October 2024, dipped by Rs 175 or 0.24% to Rs 71,655, at the time of writing. The bullion ranged from Rs 71,725 to Rs 71,607.

Meanwhile, MCX silver futures with September expiry, slipped by Rs 163 or 0.19% to Rs 84,700. This commodity ranged from Rs 85,030 to Rs 84,576.

Looking ahead, Kalantri said, "Gold has support at $2,492-$2,478, with resistance at $2,522-$2,540. Silver has support at $29.22-$28.96, with resistance at $29.74-$29.98. In INR terms, gold has support at ₹71,510-₹71,320, with resistance at ₹72,120-₹72,380. Silver has support at ₹84,250-₹83,780, with resistance at ₹85,600-₹86,150."

Spot Gold, US Gold Futures:

Currently, the XAU/USD - Gold Spot US Dollar held above the $2,500 per ounce mark, however, traded slightly lower. The spot gold was at $2,505.72 per ounce down by 0.3%. It ranged from $2,499.44-2,514.69 per ounce.

Similarly, US gold futures with December expiry were down by 0.2% to trade at $2,541.80 per ounce. This bullion traded in the range of $2,536.15-2,551.35 per ounce for the day.