Gold rate today: The domestic gold futures kicked off the evening trade on the (MCX) on a tepid note, tracking the weakness in the international markets as the US dollar strength outweighed the geopolitical risks stemming from US-Israeli military action against Iran.
MCX gold futures for April expiry opened with a 3% cut at ₹161,092 per 10 grams as against its last close of ₹166,074. MCX was closed for trading in the morning session on account of a public holiday to mark the festival of Holi.
At the same time, silver prices on MCX traded with a steeper decline of 6% as it traded at ₹261,773 per kilogram.
The weakness in the domestic futures market mirrored the global market trend, wherein as they cracked 3%, and silver faced an even bleaker fate with its 11% crash to below the $80 level at one point.
Why are gold and silver prices falling?
Additionally, fading expectations of an interest rate hike in the US by its central bank in the near term are another factor weighing on domestic and international gold prices.
Since gold is a non-yielding asset, it thrives in a low-interest-rate environment. The US Federal Reserve is expected to hold rates at the conclusion of its next two-day meeting on March 18, suggests CME Group’s FedWatch tool, a Reuters report said.
The conflict in the Middle East has already resulted in a spike in energy prices, which could trickle into inflation data and could be an influencing factor in the US Fed’s decision. The probability of a rate hold in June, previously below 45%, has now risen to more than 60%.
More to come…