Volatility In Gold Markets Influencing More Investors: Should You Buy Gold Now?

Indian gold prices, on April 4 have plunged marginally in the domestic markets. The 22 carat gold rates are quoted at Rs. 47,800/10 grams falling by Rs. 150, and the 24 carat gold rates are quoted at Rs. 52,140/10 grams, falling by Rs. 320/10 grams. In Chennai, 22 carat gold rate is quoted at Rs. 48,030/10 grams, while in Kolkata, Delhi, Hyderabad, Bangalore, and Kerala 22 carat gold rate is quoted at Rs. 47,800/10 grams.

Russia - Ukraine geopolitical tensions have again intensified after the Russian military has massacred civilians in Bucha, Ukraine. Global political leaders are condemning the attacks. Additionally, the European Union including France is again thinking about imposing new sanctions on Russia. French President has recently indicated that. With more uncertainties in the situation, gold prices can hike again.

On the other hand, recently, China has found a new variant of Covid-19, which can again trigger the gold markets marginally. The daily cases of contamination have exceeded 13,000 in the country, and the new Covid-19 subtype can be the reason. Gold in the last two years went sharply bullish due to the Covid pandemic. The delta and omicron variants, both brought similar trends in the markets. Now, this new variant can again move the gold prices up.

Significantly, Mary Daly, president of the US central bank's San Francisco branch has recently stated, "The case for 50bps, barring any negative surprise between now and the next meeting, has grown." This means, that the US Fed is realizing the importance of another interest rate hike in the next policy meeting which will take place in the first week of May. Rising inflation is the major reason, the Fed is thinking about a rate hike. Already the last rate hike has triggered the US Treasury yield to gain, now another rate hike can improve the bond yield further. Eventually, this will dominate the gold rates internationally. Hence, investors can think about buying gold when the rates will fall further to diversify their portfolios.

Today, the Comex gold futures were quoted at $1930.90/oz, gaining by 0.36%, till last traded. Yesterday it was last quoted at $1923.70/oz. The spot gold prices are quoted at $1927.50/oz, surging by 0.05%, till last traded. On the other hand, the US dollar index in the spot market stood at 98.54. In India, the MCX gold in June future was quoted at Rs. 51,480 grams, falling by 0.24%, till last traded.