Gold cheap, silver expensive: Gold prices declined in Delhi’s bullion market on Wednesday, while a slight increase was recorded in the price of silver. This fall in gold prices was due to profit booking, as rising crude oil prices have increased concerns about inflation ahead of the US Federal Reserve’s decision on interest rates. According to All India Bullion Association, today the price of silver rose marginally by Rs 500 to Rs 2,44,500 per kg. On Tuesday it was at Rs 2,44,000 per kg. According to the Bullion Association, on Wednesday, gold of 99.9 percent purity fell by Rs 1,500, or 1 percent, to Rs 1,52,800 per 10 grams. In the last trading session, the price of gold was Rs 1,54,300 per 10 grams.
Inflation concerns related to crude oil prices put pressure on gold
Bullion traders noted rising energy costs due to tensions in West Asia. Due to this, inflation may remain at high levels and central banks may be forced to keep their policies tight for a long time. Jatin Trivedi, Research Analyst, LKP Securities, said gold trading remained weak on Wednesday as continued profit-booking and inflation concerns related to crude oil prices kept pressure on the prices of the precious metal. He said that high oil prices are further strengthening the possibility that the US Federal Reserve may maintain a tight stance on its monetary policy. This will strengthen the dollar and limit the scope for rise in bullion rates.
Keep an eye on the policy decisions of the Federal Reserve
Jatin Trivedi said traders are now focusing on the Federal Reserve’s policy decision and Chairman Jerome Powell’s comments to give them an indication of what officials are thinking about interest rates in the environment of ongoing uncertainty between the US and Iran. According to the World Gold Council, gold demand in India increased by 10 percent year-on-year to 151 tonnes during the January-March quarter. This increase, despite high prices, was driven by strong investment demand. In the international market, spot gold fell by $ 23.31, or 0.51 percent, to $ 4,573.75 an ounce, while silver fell by 0.18 percent to $ 72.99 an ounce.
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