Gold prices on Friday, June 23, showed a downward trend. In the spot market, gold of 24 carats was down by Rs 430 to Rs 59,170 per 10 grams, while gold of 22 carats was lower at Rs 54,250 (Rs 54,650 yesterday). Silver was also down by Rs 500 to Rs 71,500 per kg.
In Mumbai, prices of 24 carat and 22 carat gold stood at Rs 59,020 and Rs 54,100. In Bengaluru also, 24 carat gold was at Rs 59,020 and 22 carat gold was Rs 54,100. In Lucknow, 24 carat gold was selling at Rs 59,170 per 10 grams while 22 carat gold was at Rs 54,250.
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In Kolkata, the 24 carat gold price was Rs 59,020 per 10 grams and 22 carat gold was at Rs 54,100. In Chennai, 24 carat gold was selling at Rs 59,400 per 10 grams, while 22 carat gold was at Rs 54,450.
On the MCX as at 1105 IST, gold was trading marginally up by 0.03 per cent at Rs 58,215 in the August futures trade, while silver was down by 0.51 per cent at Rs 67,962 per kg in the July futures trade.
Ravindra Rao, vice-president and head (commodity research) at Kotak Securities, said, “COMEX gold prices plunged more than 1 per cent on Thursday and closed at $1,923.7 per troy ounce on Thursday, amid sharp rebound in the greenback owing to a hawkish wave from the central banks. During the testimony to the US Congress, Federal Reserve Chairman Powell emphasised the importance to fight inflation and stated that nearly all FOMC participants expect that it will be appropriate to continue raising interest rates this year and that perhaps two more times.”
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He added that Powell also said that rate cuts won’t happen anytime soon. Following recent rate hikes by the ECB, RBA, and the BoC, the Bank of England surprised markets with another 50 bps rate hike, amid stubbornly high inflation, in tandem with recent rate increases by monetary authorities in Switzerland, Norway, and Turkey raising the opportunity cost of the non-yielding yellow metal.
“Hawkish stance from majority of the central banks shows that Fed is not an outlier here, and thus might keep the dollar supported. US economic data released yesterday were kind of mixed, showing weakness in Jobs market and recovery in Housing market. Gold prices continue to decline amid an elevated greenback and investors keenly await a slew of flash Manufacturing PMIs from UK, US and Europe later today,” Rao said.
Gold prices in India are generally influenced by a variety of factors, including global economic conditions, inflation rates, currency fluctuations, and local demand and supply dynamics.
India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually.
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Here are some factors that can affect the gold rate:
Demand and supply: The gold rate is largely determined by the demand and supply of gold in the market. If demand for gold increases, the rate will also increase. Conversely, if supply of gold increases, the rate will decrease.
Global economic conditions: The gold rate is also affected by global economic conditions. For example, if the global economy is doing poorly, investors may flock to gold as a safe haven, which will drive up the gold rate.
Political instability: Political instability can also affect the gold rate. For example, if there is a political crisis in a major country, investors may buy gold as a hedge against uncertainty, which will drive up the gold rate.
