Gold, silver prices inch higher ahead of Dhanteras, Diwali, amid a weaker dollar

Gold prices for both 22 and 24 carat weights have increased marginally to Rs 46,610 and Rs 50,830, respectively in the domestic markets despite looming inflation fears and Fed rate hike across the world.  On Tuesday, one gram of 22 carat gold is being sold at Rs 4,661, up from Rs 4,660 a day ago. Meanwhile, an equal quantity of 24-carat gold is available at Rs 5,083, as against Rs 5,083 on Monday. Silver prices touched to Rs 60,500 per kg.  

In the international market, gold continues to struggle even in light of a strong decline in the US dollar. Gold had respectable gains in New York trading on Monday, but gave up those gains in Globex trading. Dollar weakness was a major contributor in supporting gold prices from moving lower. Currently, the dollar is down 1.182 points or -1.04 per cent and fixed at 112.025.

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In the international market, Spot gold held its ground at $1,651.75 per ounce, as of 0118 GMT. US gold futures were down 0.3 per cent at $1,658.30. The dollar index was flat in Asian hours, having fallen 1 per cent overnight, while benchmark U.S. 10-year Treasury yields also eased.

Domestic prices

In Mumbai and Kolkata, 24-carat gold is selling at Rs 50,680 per 10 gram, while 22-carat gold is trading at Rs 46,460, respectively. In Delhi, 24-carat and 22-carat gold are trading at Rs 50,830 and Rs 46,610 per 10 gm, respectively.

In Chennai, 24-carat and 22-carat gold is trading at Rs 51,170 and Rs 46,910, respectively.  

Cities	22-Carat Gold Rates	24-Carat Gold Rates
Chennai	Rs 46,910	Rs 51,170
Mumbai	Rs 46,460	Rs 50,680
Delhi	Rs 46,460	Rs 50,830
Kolkata	Rs 46,750	Rs 51,000
Bangalore	Rs 46,510	Rs 50,730
Hyderabad	Rs 46,460	Rs 50,680

Gold futures

Gold is highly sensitive to rising US rates, which increases the opportunity cost of holding the non-yielding asset. A fourth straight 75-basis-point Fed interest rate hike is expected next month after data last week showed inflation increasing strongly in September.  

Even though gold prices rebounded on Monday, hopes for a durable rebound for the yellow metal — and, increasingly, other commodities as well — dimmed as investors anticipate the Federal Reserve will continue with its hawkish rate rise into the first quarter of 2023, potentially heading towards a global economic slowdown.

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Experts feel the price of gold is highly influenced by the dollar index, which is at a decades-high at present.  

Overall, the recent economic data hasn’t offered much of hope to gold traders but that could change over the coming months. The central banks are expected to stop hiking their rates, which could favour gold, especially as the economy falters.

(With agency inputs)