Gold and silver prices today: Minimal change in yellow metal despite growing rate hike expectation

Gold prices opened on the Multi Commodity Exchange (MCX) on Friday at Rs 58,674 per 10 grams and hit an intraday low of Rs 58,673. In the international market, prices hovered around $1,915.45 per troy ounce. Meanwhile, silver opened at Rs 71,460 per kg and hit an intraday low of Rs 71,260 on the MCX. The price hovered around $22.85 per troy ounce in the international market.

Anuj Gupta, Head of Commodity and Currency at HDFC Securities, said gold prices closed flat yesterday , down 0.01%, and closed at 58588 as there was no fresh buying interest in the market. However, expectation of increase in interest rates by FOMC is also putting pressure on Gold.  

"The European Central Bank has hiked interest rates to a record high as policymakers look to address elevated inflation in the eurozone despite signals that the region's economy is weakening. Gold’s latest challenge came as the Dollar Index hit a one-week high to reclaim the 105 mark. In the international market gold is trading at $1911 levels. For trading gold may trade between $1900 to $1920 levels and on mcx it may trade between 58300 to 58900 levels," Gupta added.

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Yesterday, spot gold closed marginally higher with a gain of 0.20 per cent at $1910.63 in an eventful day. China's PBoC, in its further attempt to stimulate China's struggling economy, cut the Reserve Requirement Ratio by 25 bps, which boosted commodities, especially industrials.

Praveen Singh, Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, that European Central Bank in its crucial monetary policy meet, the outcome of which was largely uncertain, unexpectedly raised its main refinancing rate and deposit facility rate by 25 bps each. The Central Bank pared down growth forecasts for the Bloc through 2025 and called inflation to be too high, though ECB President Ms Lagarde called the rates to restrictive enough to bring down inflation to the Bank's desired goal of 2 per cent. The Euro tumbled as market participants consider the latest hike to be the last hike of the Central bank's rate hike campaign which has seen ten consecutive rate hikes.

"Considering the US yields, strength in the US economy and a firmer Dollar, gold is looking pricey now, though scare of stagflation in Europe is lending some support, due to which the metal is seeing good dip buying near $1900 psychological support, a breach of which can take it to $1885/$1865. Resistance is at $1915/$1932. Outlook is turning bearish. Total known global gold ETF holdings fell for the ninth straight day through September 13," added Singh.