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Gold prices today drop sharply, down at one-week low; silver rates slump

Gold rates today fell to ₹47,403 per 10 gram

1 min read . Updated: 29 Oct 2021, 07:38 PM IST Livemint

Gold has been under pressure due to the prospect of tightening monetary conditions and a stronger US dollar

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Gold prices today fell sharply in Indian markets today, tracking weak global cues. On MCX, gold futures struggled at ₹47,403 per 10 gram, down about ₹600. Silver futures also slumped 1.3% or ₹900 to about ₹64,000 per kg. In global markets, gold fell 0.8% to $1,785.20 per ounce, hurt by a stronger dollar and an uptick in U.S. bond yields. Investors also remained cautious ahead of Federal Reserve's meeting next week.

The dollar index rose 0.43%, making bullion more expensive for holders of other currencies.

Despite high inflation expectations, gold has been under pressure due to the prospect of tightening monetary conditions and eventually interest rate hikes, say analysts. The Fed is expected to announce when it will start tapering, following a meeting on November 2-3. Interest rate hikes tend to push government bond yields and the dollar up, denting non-yielding gold's appeal.

Among other precious metals, spot silver fell 1.4% to $23.76 per ounce while platinum slipped 0.7% to $1,012.37.

“Gold prices traded under pressure on stronger dollar and mixed global cues. ECB President Christine Lagarde acknowledged higher inflation, she pushed back against market bets that inflationary pressures would trigger an interest rate hike as soon as 2022. We expect gold prices to trade sideways to down with COMEX spot gold resistance at $1810 and support at $1785 per ounce. MCX Gold December support lies at Rs. 47700 and resistance at Rs.48200 per 10 gram," said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.

On the other hand, on the downside gold may be supported by increasing challenges to the global economy which may increase its safe-haven appeal, say analysts.

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