Indian Gold Rates Quoted At Rs. 46,100, Hit Above 3 Months Low Globally: Invest Now?

Indian gold rates are marginally under pressure today, in line with the global trend. The 22 carat gold rates are quoted at Rs. 46,100/10 grams, and the 24 carat gold Rs. 50,290/10 grams, falling by Rs. 450-490/10 grams. On the other hand, the Comex gold futures have hit 3 months low-level today, on May 18.

The Comex gold futures were quoted at $1805.90/oz, falling by 0.71%, from the last trading day. Yesterday it was last quoted at $1818.90/oz. Similarly, the spot gold prices were last quoted at $1808.80/oz, falling by 0.44%, from the last trading day. The US dollar index in the spot market stood at 103.43, gaining by 0.13%. In India, the MCX gold in June future was quoted at Rs. 49,898/10 grams, falling by 0.55%, from the last trading day.

Yesterday, in the international markets, the yellow metal prices went marginally up after the US sales data was released by the US Commerce Department. Reports stated that it has advanced 0.9% in April, and earlier advanced 1.4% in March. However, some analysts were expecting a better gain in the US sales data for April. But, the core sales (striping out vehicle sales) increased 0.6% in April, beating expectations by 0.4%. So, this volatility is continuing to impact the commodity markets, including the gold markets. However, the US sales data is important for anticipating the upcoming gold rates because of its connection to the US Fed interest rate hike discussions. The US has already initiated two rate hikes and is expected to initiate multiple 50bps rate hikes this fiscal. With interest rate hikes, the government bond yield is getting higher, keeping the gold rates under pressure. Investors are marginally losing interest in gold globally.

However, in the Indian context, retail investors can think about buying gold these months, because most analysts are expecting that the yellow metal will remain bearish now. Gold rates might fall further, with another rate hike, and a marginal drop in the inflation data. A falling gold rate is always lucrative for Indian buyers because it will help them to fetch better long-term returns.

Dr. Ravi Singh-Vice President and Head of Research-ShareIndia told the media, "With the global economy in focus after weak economic data from China highlighted worries about the prospects for a global slowdown, dollar index weakened, pushing gold prices higher. However, U.S. Treasury yields climbed, limiting demand for gold. Gold prices may remain sideways this week." Dr. Ravi Singh has mentioned a Buy Zone Above - Rs. 50,250 for the target of Rs. 50,500, and a Sell Zone Below - Rs. 50,000 for the target of Rs. 49,800.