Gold prices today: Inflationary worries, slowdown concerns to support yellow metal despite impending interest rate hike

Abstract: yellow metal continues to gain; silver nears Rs 59,000

 Gold prices in India continued to move higher on Tuesday, with the yellow metal trading above Rs 52,000 level.

Gold prices move towards Rs 52700 levels while it has support at Rs 51600. Silver has support at Rs 58000 and resistance at Rs 59800, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.

In international markets, gold prices were largely unchanged on Tuesday as investors avoided the metal due to lower inflation expectations and pending interest rate hikes by central banks.

Spot gold was flat at $1,809.45 per ounce, as of 0305 GMT. US gold futures rose 0.5% to $1,809.90.

However, weighing on price is the monetary tightening stance of Fed and other central banks, firmness in the US dollar and continuing ETF outflows and a possible slowdown in Indian demand due to import duty hike,” he added.

In his analysis of gold prices, Ravindra Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities, said low bond yields, inflation concerns, and growing growth concerns in China supported gold prices.

It is also expected that the Fed may increase another 75 bps interest rate this month, however, if more aggressive steps are taken then we may see another leg of sell-off in gold prices,” he added.

The Indian gold market offered steep discounts last week as demand remained weak, with import taxes expected to further dampen interest. Meanwhile, China, one of the world’s top gold consumers, experienced a slow rebound from COVID’s curbs.

Gold fell sharply in the last few days but has managed to hold near the $1800/oz level which shows some buying interest however a sustained rise is unlikely given the focus on FOMC minutes and US non-farm payrolls data, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.


According to Ravi Singh, Vice President and Head of Research at ShareIndia, gold prices may suffer some selling pressure pending the publication of the US Federal Reserve meeting minutes on Wednesday.