Gold and silver prices have registered a sharp decline following the US Federal Reserve's policy stance.
New Delhi | Gold and silver prices registered a sharp fall on Thursday. Precious metals were seen trading under pressure in both domestic futures and spot markets. This decline came after the US Federal Reserve signaled a hawkish stance on interest rates.
According to the India Bullion and Jewellers Association (IBJA), the spot price of 24-carat gold fell sharply by Rs 816 to Rs 1,49,332 per 10 grams on Thursday morning.
Similarly, the price of 22-carat gold decreased by Rs 748 to Rs 1,36,788 per 10 grams. Meanwhile, 18-carat gold was trading at Rs 1,11,999 per 10 grams, down by Rs 612.
Along with gold, silver prices also witnessed a steep decline. According to IBJA data, the spot price of silver was trading at Rs 2,43,700 per kilogram, a massive drop of Rs 3,988.
Selling pressure was also evident in precious metals on the Multi Commodity Exchange (MCX). On Thursday afternoon, gold futures were at Rs 1,51,660 per 10 grams, down by 1.44% or Rs 2219.
Meanwhile, silver futures were trading at Rs 2,45,350 per kilogram, a significant drop of 2.56% or Rs 6757.
The main reason for the fall in gold prices is the policy stance of the US central bank, the Federal Reserve. The Fed did not change interest rates in its meeting on Wednesday but hinted at future hikes.
The Fed stated that it is keeping a close watch on inflation.
This hawkish stance strengthens the dollar and puts pressure on non-interest-bearing assets like gold. When interest rates rise, investors prefer to move money out of gold and into options like bonds, where they get a fixed return.
Analysts believe that as long as inflation concerns persist and the Fed's stance remains strict, pressure on gold prices may continue. This fall could also be an opportunity for investors, but caution is advised given the market volatility.
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