Gold and silver rate were trading weak on Wednesday, on the back of the strong U.S. Dollar. Gold October futures were down Rs 99, or 0.2%, to Rs 49,220 per 10 grams on the Multi Commodity Exchange. Silver December futures were trading at Rs 54,798 a kg, down Rs 581 or 1.05 percent. According to Reuters, after Federal Reserve policymakers reaffirmed the U.S. central bank’s commitment to maintaining an aggressive policy stance to combat rising inflation, yellow metal prices globally declined as the dollar started to rise again. The price of spot gold fell 0.3% to $1,624.81 per ounce, while the price of U.S. gold futures fell 0.2% to $1,632.4.
A firm dollar and limited upside in the precious metals complex caused MCX Gold October to give up gains made in early trading yesterday. However, rupee weakness may continue to support further declines in domestic MCX gold futures. The future is gloomy. COMEX Gold is well supported at around $1,620 per ounce. In general, MCX Gold prices may drop further, reaching Rs. 49,100 to 49,000 per 10 gm in the October contract.
Gold and silver prices experienced some pressure after a modest recovery earlier in the week as the Dollar Index regained pace after hawkish remarks from Fed officials. Neel Kashkari, president of the Minneapolis Federal Reserve Bank, asserted that financial markets are aware of the commitment among American central bankers to take the necessary steps to reduce inflation. Charles Evans, president of the Chicago Fed, stated that the central bank must increase interest rates to a level between 4.50% and 4.75%.
The Dollar Index and U.S. Yields, which are now trading at 114.40 and 3.9%, respectively, are being supported by these forecasts, depressing the price of precious metals. More than anticipated growth in new orders for capital goods produced in the United States in August suggests that companies are still eager to invest in machinery despite rising borrowing rates, which might keep the economy growing at a moderate pace. On the COMEX, the overall trend may be in the $1610–1657 range, while domestic prices may be in the range of Rs. 48,850–49,550.