Gold and silver prices declined significantly in early deals on the MCX on Wednesday, 1 July, as a stronger US dollar, firming treasury yields, and growing expectations of US Federal Reserve rate hikes keep the precious metals under pressure.
MCX gold for August delivery traded 0.86% lower at ₹1,41,300 per 10 grams, while MCX silver September futures were 2.06% down at ₹2,23,850 per kg around 9:10 am.
Gold and silver prices corrected sharply in June amid concerns about sticky inflation and the resulting US Federal Reserve rate hikes, even as crude oil prices declined after the US and Iran agreed to hold talks to resolve their conflict.
As per MCX, domestic spot gold prices dropped by ₹15,100, or nearly 10%, in June to come to ₹1,40,864 per 10 grams, while silver rates declined by ₹38,250, or almost 15%, in June to settle at ₹2,25,125 per kg on 30 June.
US gold prices saw their steepest quarterly decline since 2013 in June, falling for a fourth consecutive month amid heightened concerns that inflation will drive the Fed to raise rates.
The dollar’s sustained rise amid speculation that the US Federal Reserve may raise rates by 3 times this year has weighed on gold prices.
The dollar index jumped more than 2% in June, and is now near 101.35, making bullion expensive for buyers in other currencies and creating demand fatigue.
Most traders expect the Fed to hike rates in September, October, and December this year. The next meeting of the US Federal Open Market Committee (FOMC) is scheduled for 28-29 July.
(This is a developing story. Please check back for fresh updates.)
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
