Gold and silver prices in India opened lower on the Multi Commodity Exchange (MCX) on Friday, following weakness in the global bullion prices, and ahead of the announcement of the Reserve Bank of India’s monetary policy later today.
In the international market, gold prices traded lower as concerns over escalating US-Iran war in the Middle East dampened hopes for a peace deal amid rising inflation and interest rate-hike fears.
Spot gold price declined 0.5% to $4,452.20 per ounce. It has fallen about 1.8% for the week so far. US gold futures for August delivery fell 0.6% to $4,478.50. Spot silver dropped 1.4% to $72.89 per ounce,
The Iran-backed Hezbollah militia rejected a new ceasefire in Lebanon and Israel said it would not withdraw troops from the country, undermining US President Donald Trump’s efforts to halt fighting there to forge peace with Tehran, Reuters reported.
While gold is seen as a hedge against inflation, higher interest rates tend to weigh on the non-yielding metal.
Investors will focus on the RBI monetary policy and repo rate decision later today. The June RBI MPC meeting comes amid a backdrop of a challenging macroeconomic environment as the adverse impact of the US-Iran war in the Middle East on domestic growth and inflation dynamics.
Meanwhile, markets are pricing in a US Federal Reserve rate hike before year-end, with a 51% chance of a move by December, according to CME Group’s FedWatch tool.
Investors now await the May US nonfarm payrolls data, due later in the day, to gauge the Fed’s monetary policy path.
