New Delhi. Reserve Bank of India (RBI) has increased the repo rate by 25 basis points. After this, pressure was seen in the prices of gold and silver on Wednesday. RBI has increased the repo rate to 5.50 percent. The central bank has taken this decision to control inflation and amid uncertainty at the global level.
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After the increase in repo rate, the price of gold fell by about Rs 600 to Rs 1,49,350 per 10 grams. Whereas silver fell by about Rs 1,900 and its price came to Rs 2,25,236 per kg. In the day's trading, gold on MCX had gone down to Rs 1,49,350.
Pressure on dollar and bond yield also
The reason for the fall in gold and silver prices is not just the RBI decision. A stronger US dollar and rise in US bond yields also put pressure on the precious metals. In the international market, Comex gold futures were trading at around $ 4,169.51 an ounce and silver futures at around $ 61.17 an ounce.
Gold and silver are assets which do not earn regular interest. In such a situation, when repo rates and government bond yields increase, fixed income and debt instruments may become more attractive for investors. The 10-year government bond yield has also reached around 7.2 percent.
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Gold is getting support at Rs 1.49 lakh
According to Jatin Trivedi, commodity and currency expert of LKP Securities, gold is getting support at the level of around Rs 1.49 lakh. However, rise in US bond yields and strength of dollar index may limit further upside in gold prices.
According to Trivedi's estimate, the market may remain volatile in the near future and the price of gold may remain between Rs 1,48,000 to Rs 1,51,000. For this reason, pressure on silver prices may also be seen.