Gold in India saw a marginal fall on Wednesday in line with global trends, with the May futures declining 0.46 per cent to Rs 60,055 per 10 grams and the June futures trading about 0.59 per cent down to Rs 60,133 per 10 grams. Experts said gold prices are expected to remain low, as the possibility of the US Federal Reserve boosting interest rates would limit the upside and decrease demand for the yellow metal.
According to the latest MCX data, almost all commodities were trading low in the futures trading on Wednesday, except for natural gas and lead. Crude oil was the most hit trading 1.11 per cent down at Rs 6,616 per barrel.
Prathamesh Mallya, assistant vice-president (research- non-agri commodities, and currencies) of Angel One Ltd, said, “On Tuesday, gold prices bounced back from the initial weakness seen at the start of the week, as prices climbed by half a percent to end higher. The support comes as the US currency weakens, and traders assess the likelihood of the Federal Reserve hiking interest rates only once more in May before halting."
He added that meanwhile, the European Central Bank’s (ECB) top economist supported another rate hike at the ECB’s next meeting but stressed the size of the rise will be determined by incoming data. Gold is regarded as a hedge against inflation and economic uncertainty, but rising interest rates reduce the appeal of the non-yielding asset.
“Gold prices are expected to remain low, as the possibility of the US Federal Reserve boosting interest rates would limit the upside and decrease demand for the yellow metal," he said.
In the international market also, gold prices fell on Wednesday as the U.S. dollar regained some ground, while investors assessed the chances of the Federal Reserve raising interest rates just once more in May before pausing.
Spot gold was down 0.6 per cent at $1,993.99 per ounce, as of 0654 GMT. US gold futures slid 0.8 per cent to $2,003.30.
The dollar index was up 0.2 per cent, making gold less affordable for buyers holding other currencies.
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