Gold rates today fall for third time in 4 days, silver prices drop
Premium- Gold and silver prices today: Precious metal rates remained in a narrow range ahead of this week's US inflation data
Gold and silver prices in India today edged lower amid subdued global cues. On MCX, gold futures were down 0.13% to ₹50,900, their third decline in four sessions. Silver futures slipped 0.15% to ₹62,151 per kg. In global markets, gold prices were steady today ahead of US inflation report due later this week. Spot gold was down 0.1% at $1,850.41 per ounce. Among other precious metals, silver eased 0.1% to $22.19 while platinum fell 0.1% to $1,009.84 an ounce and palladium rose 0.4% to $1,991.
Global financial markets continue to be very volatile as sentiment remains fragile with investors worrying that global central banks could raise interest rates aggressively rein in inflation. US consumer prices reading for May is due on Friday and traders will be watching it keenly to discern the Federal Reserve’s rate path. The US Federal Reserve is expected to raise its benchmark funds rate by 50 basis points next week
Gold traders will also be watching ECB meeting on Thursday and analysts are expecting the European Central Bank to at least lay the groundwork for rapid rate rises in future.
On Tuesday, the World Bank cut its forecast for global growth further, warning that several years of above-average inflation and below-average growth lie ahead. The World Bank slashed its global growth forecast to 2.9% for 2022, warning that Russia's invasion of Ukraine has compounded the damage from the COVID-19 pandemic, and many countries now faced recession.
In a note on its outlook for gold prices over 12-18 months, Moody's said: “Gold prices remain at historically strong levels supported by a number of factors including high inflation, record commodity prices and geopolitical tensions including the Russia-Ukraine military conflict. Prices, which reflect gold's use as a safe haven or store of value, will remain strong because of the global uncertainties and risks stemming from the conflict."
“Adding to the appeal of a safe haven investment is the fact that the global economy has not fully recovered from the COVID-19 shock. Rising interest rates tend to dampen gold prices. But with current high inflation, we do not believe other safe-haven investments will provide enough return, if any, over the medium term (beyond 12 months) to draw investors away from non-yielding gold," the agency added.
On silver, Moody's said: “Current silver prices remain supported by both industrial demand (solar and electrical application) and investment demand (safe haven investment). Also supporting strong prices is supply's failure to keep up with demand. The silver market experienced a deficit of 51.8 million ounces in 2021, according to the The Silver Institute, the biggest since 2010."