Gold prices have fallen by 0.5% to $1,980.78 per ounce, while U.S. gold futures shed the same percentage to $1,989.20. The fall in prices is attributed to the strong dollar and weak oil prices. A decline in investment funds also contributes to the decline in the precious metal's value.
India's gold prices have declined by ₹105 to ₹59,975 per 10 grams due to a fall in the global market. Senior Analyst at HDFC Securities, Saumil Gandhi, states that traders are wary of fresh buying before the US Federal Reserve's meeting on May 2-3, 2023. This event is a crucial factor that will determine the future direction of gold prices.
While gold prices decrease, silver rates increase in India. The rate for silver has risen by ₹730 to ₹75,700 per kg, which is a good indicator of the metal's value.
Forex traders are keeping a close eye on gold prices as the dollar index rose 0.2%, making it more expensive for overseas buyers to purchase greenback-priced bullion. Investors are expecting a 25 basis-point interest rate hike during the Federal Open Market Committee's (FOMC) meeting on May 2-3, which is a significant factor that could influence gold prices in the forex market.
Gold is often considered an inflation hedge, but rising rates tend to dull its appeal as a zero-yielding asset. Despite this, gold prices increased by over 1% in April due to renewed concerns over the U.S. banking sector. The safe-haven appeal for investors was enhanced, which pushed gold prices up during this period.
Forex traders are closely watching the outcome of the FOMC meeting as it will determine the direction of interest rates in the US. A rise in interest rates could lead to a decline in gold prices, while a decision to maintain the status quo could lead to an increase in gold prices. Forex traders are closely monitoring the outcome of the meeting to make informed decisions about their investments in the precious metal.