New Delhi, Sep 21: Gold’s upward momentum ran into fresh headwinds on Monday, with futures slipping Rs 832 to Rs 1.53 lakh per 10 gram as a firm US dollar and renewed rate-hike concerns prompted investors to book profits.
On the Multi Commodity Exchange (MCX), the yellow metal futures for October delivery traded lower by Rs 832, or 0.54 per cent, to Rs 1,53,549 per 10 grams.
Last week, gold gained Rs 1,597, or 1.04 per cent, to end at Rs 1.54 lakh per 10 gram.
“MCX gold slipped below Rs 1.54 lakh per 10 gram after the dollar index is holding above the 100-mark following last week’s rate hike, the first increase in three years, with Fed Chair Kevin Warsh’s hawkish tone continuing to underpin the greenback even as much of that move now looks priced in,” said Ashish Rajodiya, Head of Commodities at PL Capital.
Dollar strength weighs on gold
Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said the pressure was also visible in physical markets, where Indian buyers largely stayed on the sidelines, waiting for more favourable price levels amid weak global cues and subdued domestic retail demand.
In the international markets, Comex gold futures slipped USD 32.93, or nearly 1 per cent, to USD 4,391.97 per ounce. Last week, the precious metal ended marginally higher at USD 4,424.9 per ounce in New York.
Gandhi said gold was trading near USD 4,350 an ounce as profit-taking after last week’s recovery and a rebound in the US dollar index weighed on precious metals.
Rate concerns impact sentiment
The dollar has found further support from concerns over persistent inflation.
Minneapolis Fed President Neel Kashkari has flagged inflation remaining elevated beyond the initial oil-shock trigger, while analysts at Nordic financial services group Nordea expect the Federal Reserve to deliver two additional interest rate hikes due to a resilient US economy, tight labour market, and sticky inflation.
Geopolitical risks remain
Ashish Rajodiya added that geopolitical uncertainty remains in the background, with traders watching West Asia for developments that could revive safe-haven appeal for the precious metals.