Sharp Drop In Indian Gold Rates: Good Time To Buy Gold?

Indian gold rates have fallen sharply today reflecting international trends. The 22 carat gold rates are quoted at Rs. 48,450, and 24 carat gold rates quoted at Rs. 52,860/10 grams, falling by Rs. 540 and Rs. 580/10 grams respectively. In the Indian markets, demands for retail gold can increase now with lower rates across the nation.

The gold markets are down now globally, as the US Federal Reserve is expected to hike the interest rate. Investors are anticipating a rate hike in the next Fed policy meeting in the first week of May, to squeeze liquidity in the economy. The Fed is might try to control the high inflation rate by hiking the interest rate by 50 bps. The rising US Bond yield can gain further with that decision. So, investors are marginally losing interest in gold. Gold might lose its importance as a hedge against inflation. Significantly, Indian gold rates depend on global rates, hence, gold prices in India are also bearish now.

Recently, the gold rate has plunged around the $1896 level in the futures markets. Anticipating upcoming gold prices, Rajan Dhall told Kitco News, "On the downside, the next big support comes at the purple line at $1855.7/oz. If the price does break to the downside that could be the next area to look out for. Above the current level, there is lots of traffic but the price has always been drawn to the VPOC (volume point of control) level at $1935/oz. For now, the bears are in charge and downside levels are in focus."

Today, the Comex gold futures were quoted at $1902.80/oz, gaining by 0.35%, till last traded. Yesterday it was last quoted at $1896/oz. The spot gold prices are quoted at $1904.30/oz, gaining by 0.25%, till last traded. On the other hand, the US dollar index in the spot market stood at 101.84, gaining by 0.14%. In India, the MCX gold in June future was quoted at Rs. 51,572 grams, gaining by 0.31%, till last traded.