The US central bank Federal Reserve's decision to raise interest rates has put heavy pressure on gold and silver prices. Precious metals have seen a decline in both domestic and global markets.
The US central bank, the Federal Reserve (US Fed), announced on Wednesday night an increase in key interest rates after more than three years. The direct impact of this decision has been seen on the prices of gold and silver.
Following the rate hike by the US Fed, gold and silver prices on COMEX registered a fall of more than 1%. This also affected the domestic futures market, where gold was seen trading in the red on Thursday morning.
On the MCX exchange, at 9:31 AM on Thursday, the futures price of gold for October 5 delivery was trading at Rs 1,51,277 per 10 grams, a significant drop of 0.78% or Rs 1200.
Along with gold, domestic futures prices of silver also saw a sharp decline on Thursday. On the MCX, at 9:34 AM, the rate of silver for December 4 delivery fell by 0.86% or Rs 2025 to Rs 2,32,761 per kilogram.
Globally, gold and silver prices also showed a downward trend. On COMEX, the global price of gold fell by 1.21% or $52.90 to $4,334.60 per ounce.
Similarly, the global price of silver on COMEX was trading at $64.17 per ounce, down by 1.15% or $0.75.
The main reason for the fall in gold prices is the increase in interest rates by the US Fed. The Federal Reserve has approved a 0.25% increase in interest rates after more than 3 years.
After this hike, the Fed rate has come into the range of 3.75 to 4 percent. The Fed has also indicated another rate hike by the end of the year to curb rising inflation.
With the Federal Reserve raising interest rates, investors may now shift from non-interest-bearing assets like gold to interest-bearing assets such as treasury bonds. This is the reason for the decline in gold prices.
A decline in gold prices was also recorded in the domestic spot market on Thursday. According to Good Returns, at 9:50 AM in Delhi, the rate of 24-carat gold was Rs 1,52,990 per 10 grams, a fall of Rs 600.
Delhi: 24 Carat Gold ₹1,52,990, 22 Carat Gold ₹1,40,250.
Mumbai: 24 Carat Gold ₹1,52,840, 22 Carat Gold ₹1,40,100.
Chennai: 24 Carat Gold ₹1,52,840, 22 Carat Gold ₹1,40,100.
Kolkata: 24 Carat Gold ₹1,52,840, 22 Carat Gold ₹1,40,100.
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