Indian Gold Rates Can Further Drop, With Improved Job Market India, Invest Now: Check Rates

Indian gold market is quite bearish today, after surging for two days straight. The 22 carat gold rate is quoted at Rs. 47,750 falling by Rs. 350, and the 24 carat gold rate is quoted at Rs. 52,100/10 grams, falling by Rs. 370. At present, the US job market is driving the international gold rates, which are being followed in the Indian markets. Recently, ADP National Employment Report has revealed that US nonfarm payroll has surged by 128,000 in May from April, although missed the earlier estimates.

Commenting on the employment situation and its impact on the international gold markets, TD Securities global head of commodity strategy Bart Melek, told Kitco News, "The May jobs report is showing moderation in economic momentum. However, the sharp declines anticipated by the market recently don't seem to be materializing. On the margin, this implies that the market may well increase rate expectations. Indeed, rates (nominal and real) across the curve rose following the report. This helped to drive the yellow metal below $1,860/oz at the time of writing, down from around $1,863-66/oz before the report was released." However, any plunge in gold rates in India is expected to increase the retail demands.

Now, the inflation rate very quite high in the US, but in the last month it has slowed down marginally after a long time. The US Fed is hawkish against inflation and initiating multiple interest rate hikes. It is impacting the commodity and equity markets negatively. Gold is considered a hedge against inflation and a safe haven by investors. With falling inflation, gold rates will also drop. With the rising interest rates, many analysts are expecting that recession might arrive. This worry is keeping the gold rates around mid-$1,800 level in the global markets. Commenting on the present market trend, Gainesville Coins precious metals expert Everett Millman told Kitco News, "In any kind of recessionary environment, when people are worried about losing jobs or the value of their wealth, gold is the logical place for money to preserve value."

The Comex gold futures were quoted at $1853.90/oz, falling by 0.93%, from the last trading day. Yesterday it was last quoted at $1871.40/oz. The spot gold prices were last quoted at $1852.30/oz, falling by 0.93%, from the last trading day. The US dollar index in the spot market stood at 102.16. In India, the Mumbai Commodity Exchange (MCX) gold in August future was quoted at Rs. 50,984/10 grams, falling by 0.56%, from the last trading day.