Indian Gold Rates Dropped Marginally, Amid Inflation Concerns

Indian Gold rates have dropped by Rs. 60/10 grams today, amid inflation concerns intensified in the USA. Today, on December 10, 22 carat gold rates are quoted at Rs. 46,790/10 grams and 24 carat gold rates are quoted at Rs. 47,790/10 grams. Significantly, on the other hand, gold rates in Chennai have gained by Rs. 230, and gold rates in Bangalore gained by Rs. 180/10 grams.

The headline inflation in the US in November has hit the highest level in the past 40 years at 6.2%, and the US Federal Reserve not will be forced to take action to control it, the analysts are thinking. Some economists have not been happy with the US monetary policy for a very long time and think that the liquidity infusion and low-interest rate are impacting the high inflation rate to surge further. Weekly employment generation in the country has also improved lately.

It is a common phenomenon, that the gold market is directly related to inflation as the metal is traditionally considered as a hedge against inflation. In October, in the recent period, has been a significant proof of that. However, in December, the notion changed slightly. Amid inflation concerns, the gold price is not gaining much. Yesterday, the US announced its CPI inflation at 40 years high range, but the rates did not react sharply. Today is Saturday, and the market is closed. On Monday, it will be an important day for the gold investors and traders. They are also waiting for the upcoming US Fed meeting, next week.

Commenting on the recent gold rate trend, Analyst Christopher Ecclestone, Principal and Mining Strategist at Hallgarten & Co. Told Kitco News, "There's only one reason why the price of gold will go down, and that is if central banks soft-pedal on inflation, and that's what they have done so far. But as we see inflation continue to rise, particularly in the US and the UK, it has gotten out of control. Only higher interest rates will keep inflation down." If the US Fed fails to give a promising monetary policy to restrict inflation soon, only then the gold rates can react bearishly, otherwise, gold market analysts earlier expected the rates to reach the $1900/oz level, in 2022.

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

Today the Comex gold futures gained by 0.47% and were quoted at $1783./oz, while the spot gold prices gained by 0.43%, and were quoted at $1784.2/oz till last traded. Yesterday Comex gold futures closed at $1774.6/oz. On the other hand, the US dollar index in the spot market fell to 96.07. Mirroring the same global gold rate trend, in India, the Mumbai MCX gold in February future quoted at Rs. 48,189/10 grams, gained by 0.52%, till last traded.