Gold prices tumble to lowest in one month, silver rates slump
NEW YORK (Nov 3) Gold prices fell sharply in Indian markets to one-month lows, following a sharp selloff in global rates. On MCX, futures of yellow metal fell 1% to ₹50,105 per 10 gram while silver tumbled 2.3% to ₹57,445 per kg. In global markets, bullion fell sharply as as the dollar and US bond yields climbed after comments from Federal Reserve Chair Jerome Powell. Spot gold dropped 0.5% to $1,626.17 per ounce.
Overnight, the Fed raised rates by 75 basis points as expected but Chair Jerome Powell said it was "very premature" to discuss when it might pause the rate hikes. Bullion rose as much as 1.3% after the release of the Fed policy statement, before ending the session 0.8% lower on Powell's remarks.
Other commodities also traded lower. “Commodities trade lower on sharp rebound in dollar index following Fed chair hawkish remarks in the post policy commentary. Dollar trades 1.5% higher near session high of 112.9 as Federal Reserve Chair Jerome Powell dashed market hopes of a pause in its hiking of interest rates as inflation remains high," Kotak Securities said.
Elsewhere, spot silver fell 0.9% to $19.10 per ounce.
"Gold prices fell below $1620 in Comex on back of strong dollar and hawkish statement from Fed, sending the Comex Gold down by a 1% from 1635$ to $1618. MCX Gold dropped to ₹50000 at the same time down 1% as well. Overall Gold strength has weaken due to dollar index high prices churning money into dollar from other assets. Gold prices can continue weakness as long as below $1650 in Comex and ₹51000 in MCX," Jateen Trivedi, VP Research Analyst at LKP Securities.
Investors will focus on other crucial data, including the nonfarm payrolls report due on Friday.
Analysts say that gold is likely to remain rangebound in the zone of $1,650 and $1,600 and a break either side could decide the short-term direction.
“There was no also respite from the investment demand front as investors continued to redeem their gold holdings as indicated by the SPDR holdings data. The holdings witnessed a fourth consecutive fall to 919.12 tonnes a fall by 1.45 tonnes. The holdings is close to Feb 2020 lows," Kotak Securities said in a note.
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