Indian Gold Prices Declining Before Diwali, Check Rates On Nov 4: US Tapering Impacted On Gold Rates

Indian gold rates have gained marginally today on November 4, after Jerome Powell, US Fed Chairman officially announced that the central bank is going to start tapering soon. Gold prices yesterday dropped by Rs. 440 / 10 grams today, but today remained the same in India. Today 22 carat gold rates are quoted at Rs. 46,410/10 grams and 24 carat gold rates are quoted at Rs. 47,410/10 grams. However, in Kolkata, gold rates have increased by Rs. 750/10 grams today.

The Comex gold December futures today hiked by 0.86% and was quoted at $1779.1/oz, while the spot gold prices also hiked by 0.54%, and were quoted at $1779.8/oz till 4.25 PM IST. However, yesterday, as an immediate reaction to the tapering announcement, the Comex gold rate dropped and was closed at $1763.9/oz. On the other hand, the US dollar index in the spot market stood at 94.25, hiked by 0.44% than yesterday. Mirroring the same global gold rate trend yesterday, in India, the Mumbai MCX gold in October future also dropped by 1.26% and was quoted at Rs. 47,020/10 grams, till 11.29 PM IST.

Gold rates in different Indian cities are quoted differently, daily. Today's gold rates in major Indian cities follow:

City	22 carat (INR/10 Grams)	24 carat (INR/10 Grams)
Mumbai	46,410/-	47,410/-
Delhi	46,700/-	50,900/-
Bangalore	44,550/-	48,600/-
Hyderabad	44,550/-	48,600/-
Chennai	44,470/-	48,500/-
Kerala	44,550/-	48,600/-
Kolkata	47,850/-	50,550/-

Yesterday was the last trading day, today the market is closed due to Diwali. A drop in gold rates is going to increase the gold demand in the country, as it will be affordable for them.

(Also read: Will Gold Rates Fall In Diwali? Impact on Indian Gold Jewellery Demands)

"Gold is stuck right now because investors are still trying to determine what inflation is going to look like. We are in that camp where 'inflation is not transitory.' We can see prices starting to go up. We see more permanent inflation down the road. That is a recipe for higher gold prices," Agnico Eagle CEO Sean Boyd told Kitco News.

(Also read: US Fed Announces Monthly Tapering By $15 Billion: Reaction On The Market)

However, inflation is a big concern for the US monetary policy now which is directly impacting the gold rates globally. The only reason gold rates again jumped back to $1779/oz after only one day of tapering announcement is inflation. Powell after the FOMC meeting stated, "The level of inflation that we have right now is not consistent with price stability. For us, transitory has meant that it won't leave behind permanent or persistently higher inflation. We acknowledge uncertainty around transitory." He later added on jobs data, "We try to focus on what we can control. The focus of this meeting is on tapering and not raising rates. There's still ground to cover to reach maximum employment."