Gold prices down for a third straight session on Tuesday, as expectations of interest rate hikes in the United States and Europe edged the bullion’s demand. The opening price for gold was Rs 51,167 per 10 grams, down Rs 288 from Friday’s closing price of Rs 51,455, while the silver price was Rs 62,471 per kg, down Rs 317 from Rs 62,788.
On the Multi Commodity Exchange of India (MCX), the gold contract for August delivery was trading at Rs 51,060 per 10 grams, up Rs 90 (0.18 %), while the silver contract for July delivery was trading at Rs 62,421, up Rs 752 (1.22%). In the global market, gold prices edged higher on Monday, supported by a slight pullback in the U.S. dollar and Treasury yields news agency Reuters reported.
The Federal Reserve is on track for half point interest rate hike in June, July, and last week’s jobs report helped expectations of continued tightening by the U.S. central bank. Friday’s CPI report is now being awaited for further clues on the rapidity of U.S. rate increases.
The European Central Bank also meets later this week as investors ramp up their bets on interest rate hikes this year. Higher rates reduce gold’s appeal as they increase the opportunity cost of holding non-yielding bullion. India’s gold imports in May jumped 677% from a year ago to the highest level in a year, as correction in prices just before a key festival and wedding season helped retail jewellery purchases, a government source said on Monday.