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Gold prices plunge in Indian markets; silver rates slump too
Gold futures on MCX were down 1.5% to ₹47,799 per 10 gram while silver was down 1.6% to ₹70,345.
The gold and silver prices on Thursday plunged in India, tracking an overnight crash in global rates. This comes after the US Federal Reserve indicated that it might raise interest rates sooner than expected.
Gold futures on MCX were down 1.5% to ₹47,799 per 10 gram while silver was down 1.6% to ₹70,345.
"Gold was crushed overnight by a more hawkish Fed. It has staged a modest recovery in Asia but the rally looks more like speculative dip buying and fast money short-covering, than a vote of confidence in the yellow metal," said Jeffrey Halley, senior market analyst at OANDA, reports news agency Reuters.
"The recovery in gold should be approached with caution as we have yet to see how a change in tone from the Fed will fully play out in markets. Gold's daily close below $1,797.50 will signal a deeper correction is in prospect," he added.
The US Fed on Wednesday began closing the door on its Covid-19 pandemic-driven monetary policy. Gold is seen as a hedge against inflation, but an increase in rates from the Fed will dampen bullion's appeal as it translates into higher opportunity cost of holding it.
Among other metals, silver gained 0.5% to $27.09 per ounce, palladium dropped 1% to $2,770.49, while platinum rose 0.5% to $1,127.49.
