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Gold prices in India on Thursday remained unchanged from their previous day, on the contrary, silver got cheaper today across the country. At MCX, gold futures traded at a slower pace with marginal upside, whereas silver futures made a significant correction.
In India, a 10 gram gold in 24 carat is priced at ₹53,780, while a 100 gram is available at ₹5,37,800 same as the previous day. A 10 gram and 100 gram gold in 22 carat are available at ₹49,300 and ₹4,93,000 respectively today.
As per Good Returns, 24 carat gold is priced at ₹54,160 in cities like Chennai, Coimbatore, and Madurai. While gold is available at ₹53,780 in cities like Mumbai, Delhi, Kolkata, Bangalore, Hyderabad, Kerala, Vijayawada, Mangalore, Visakhapatnam, and Mysore.
In cities like Pune, Vadodara, Patna, Nagpur, and Nashik - gold is available at ₹53,840. Whereas the yellow metal is priced at ₹53,830 in cities like Ahmedabad and Surat. Meanwhile, the price is ₹53,930 in cities like Jaipur, Lucknow, and Chandigarh.
On the other hand, 1 kg silver is available at ₹67,100 down by ₹300 from the previous day of ₹67,400. 10 gram and 100-gram silver are priced at ₹671 and ₹6,710.
Indian yellow metal made a cautious movement while tracking the international spot gold which was headed for its first weekly drop in three as soaring US treasury yields and steady dollar dampened bullion's appeal.
At around 2.32 pm, at MCX, gold futures maturing June 3, was trading at ₹52435 up by ₹22 or 0.04%. The bullion traded between the day's high and low of ₹52382 and ₹52662 respectively.
Silver futures maturing May 5, on the exchange, dived by ₹634 or 0.94% and was trading at ₹66491. Silver traded between the day's high and low of ₹66443 and ₹67256 respectively.
On bullion outlook today, Raj Deepak Singh, Saif Mukadam, and Thirushankar C R, Research Analysts at ICICI Securities said, "MCX gold prices are expected to trade with a negative bias for the day on expectations of aggressive monetary policy by US Fed. MCX gold prices likely to correct towards 20-day moving average ( ₹52,125) for the day, below which, it may get further dragged down towards ₹51,600 levels in the coming days."
Spot gold currently was lower by 0.49% and traded at $ 1,941.76 an ounce. US gold futures for June maturity witnessed volatility and were slightly lower near $1,944.
Bullions are sensitive to a spike in US short-term interest rates and soaring bond yields as they push the opportunity cost higher of holding non-yielding bullion. On Thursday, Comex gold fell by 0.25% amid hawkish comments from Fed Chair Jerome Powell. US dollar index advanced after the Fed chair stated a 50 basis points interest rate hike is on the table.
Further, ICICI Securities analysts said, "improved jobless claims data from the US weighed on bullion prices. The number of Americans filing new claims for unemployment benefits slipped to 184,000 from 186,000 for the week ended April 16 due to robust labour demand."
With monetary policy tightening by major central banks, will Indian gold get cheaper?
The trio at ICICI Securities believes that Indian gold prices will reach below ₹50,000 by this month. They pointed out that Comex Gold prices edged higher by 2.20% and made a high of $2078/ounce last month as market participants were worried over the Russia-Ukraine turmoil. Further, concerns about elevated inflation boosted demand for safe-haven assets.
However, the ICICI Securities pointed out that gold prices came under pressure again in the second half after the US Federal Reserve raised its key benchmark interest rate by 0.25%, the first increase in Fed funds rate since 2018 to tame high inflation. Higher interest rates increased the opportunity cost of holding non-yielding bullion. Better-than-expected jobs data pushed the dollar index to one year high, making gold more expensive for other currency holders. US unemployment rate retreated to 3.60% in March 2022 vs. 3.80% in the previous month.
CFTC data showed that large net speculators reduced their net positions in Comex gold to 257,600 contracts from 274,400 contracts over the few weeks, indicating bearish sentiments.
That said, the analysts said, MCX gold prices are expected to correct further towards ₹49,500 in anticipation that major central banks across the globe will tighten their monetary policy aggressively to combat higher inflation. Further, gold may slip on optimistic sentiments in the global markets."
"Silver prices are expected to take cues from gold prices and move further towards ₹64,000 level in this month," the analysts added.