Sun, April 21, 2024

The Gold Market Faces Pressure Amidst Fed Decision

Gold

The recent rate pause decision by the US Federal Reserve has triggered significant sell-off pressure in the gold market. Despite its inherent stability, gold’s price today is experiencing a downward spiral, affecting investors and the global commodities market. Let’s delve into the factors contributing to this downturn and its implications.

Gold Price Plummets

The October 2023 gold futures on MCX started at ₹59,315 per 10 gm but dropped to a low of ₹59,004. Simultaneously, the international market has seen prices oscillating around $1,928 per ounce, painting a bleak picture for enthusiasts.

Silver prices on MCX fell significantly, starting at ₹72,970 per kg and dropping sharply to an intraday low of ₹72,195. Silver prices hover around $23.16 per ounce in the global market, mirroring the bearish sentiment.

US Fed’s Hawkish Decision

The root of this turmoil lies in the recent decision by the US Federal Reserve. While the central bank chose to keep interest rates unchanged, it raised media interest rates from 4.60 per cent to 5.10 per cent. The upcoming Fed meetings in November and December indicate a likely pause in rate cuts, suggesting a stable monetary policy.

Gold ETF Market Signals

Amit Sajeja from Motilal Oswal adds more pressure, pointing out that the global ETF market is also issuing warnings. Profit booking in the ETF market has created downward pressure on gold prices. This trend is expected to persist in the short to medium term, further impacting the market.

In conclusion, the gold market is grappling with various factors, including the US Federal Reserve’s hawkish stance, profit booking in the ETF market, and international economic conditions. These pressures have driven down the price of gold bars, affecting investors and those interested in the price of 9-carat gold and understanding gold weight. As the market continues to navigate these challenges, investors and enthusiasts will closely monitor developments in the market, hoping for a return to more stable conditions.

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