Gold prices today jump but still down ₹11,000 from record highs, silver surges
- Heightened concerns about inflation had driven US bond yields sharply higher, putting pressure on asset classes like equities and gold
Gold and silver prices in Indian markets jumped today after the US Federal Reserve maintained its easy monetary policy stance. On MCX, gold futures rose 0.8% to ₹45,189 per 10 gram while silver rates surged 1.2% to ₹68,021 per kg. In the previous session, gold had ended flat while silver rose 0.5%
In global markets, spot gold today rose 0.5% to to $1,752.41 per ounce after the US Federal Reserve reiterated its stance to keep benchmark rates near-zero through at least 2023 while keeping interest rate unchanged near zero. The US dollar fell sharply overnight making the greenback-denominated metal cheaper for non-US investors.
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"Technically, the Dollar Index has given a correction from $92.00 level but found support near $91.20 levels. However, a trade below could see a downside momentum up to $90.65 levels. However, any bounce back from $91.30 could take the Index up to $91.70-$92.00 levels," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Most Asian stock markets were higher today after the US central bank said on Wednesday that the economy is on track for its fastest expansion in nearly 40 years.
US treasury yields were steady. Lower interest rates reduce the opportunity cost of holding the non-yielding bullion and weigh on the dollar.
Overnight, the S&P 500 hit a record as Fed Chairman Jerome Powell reiterated the central bank’s tolerant stance on inflation and the recent rise in bond yields.
Analysts say that Fed's emphasis on continued policy support reassured the markets. Heightened concerns about inflation have driven bond yields sharply higher, putting pressure on asset classes like equities and gold. The precious metal has fallen sharply from its August highs of ₹56,200.
Gold traders will also be watching monetary policy decision of Bank of Japan and Bank of England, both due later this week.
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