Gold and silver prices in India opened lower on the Multi Commodity Exchange (MCX) Wednesday, following weakness in global bullion prices, as escalation in the tensions between the US and Iran in the Middle East stoked inflation fears and lifted the dollar.
MCX gold rate for August futures contracts opened 0.13% lower at ₹145200 per 10 grams as against its previous close of ₹1,45,392 level. MCX silver price for September futures contracts opened 0.36% lower at ₹2,30,015 per kg as compared to its previous close of ₹2,30,857 level.
In the global markets, gold prices were volatile, as concerns around inflation and higher interest rates rose after fresh US strikes on Iran lifted crude oil prices and the dollar ahead of the release of the Federal Reserve’s June meeting minutes.
Spot gold price gained 0.5% to $4,125.59 per ounce, after dropping to its lowest since July 2 earlier in the day, while US gold futures for August delivery declined 0.5% to $4,136.30. Spot silver rose 0.8% to $60.47 per ounce.
Crude oil prices jumped, US Treasury yields advanced, while the dollar clung to its highest levels of the week against most of its peers, after the US military unleashed a new wave of strikes against Iran and revoked a licence allowing the country to sell oil after three tankers were hit by projectiles in the Strait of Hormuz.
Meanwhile, investors now await minutes of the Federal Open Market Committee’s June 16-17 meeting, due later today, for fresh clues on the interest rate path under Fed Chair Kevin Warsh.
Markets have increased their bets for a September Federal Reserve rate hike to an over 63% chance, up from about 57% on Tuesday, the CME FedWatch tool showed.
While gold is seen as an inflation hedge, high interest rates tend to weigh on the non-yielding asset.
(More to come)