2 weeks ago
Gold, silver drop on MCX amid oil-driven rate hike fears
Gold and silver are shiny metals that people buy to keep their money safe.
On Tuesday, their prices went down a little bit.
This happened because the price of oil, which is used to make fuel, went up.
When oil gets expensive, people worry that other things will get expensive too.
To stop that, banks like the US Federal Reserve might make borrowing money cost more.
When that happens, people prefer keeping money in banks instead of buying gold.
That is why gold and silver prices fell.
There is also trouble between the US and Iran, which makes oil prices go up.
Investors are now waiting to see what the Federal Reserve will do next.
Gold and silver prices fell by up to 1% in early trading on Tuesday, 18 August, on the MCX due to profit-booking.
MCX gold October futures were 0.55% down at ₹1,55,090 per 10 grams, while silver September contracts were 1% down at ₹2,35,655 per kg.
Brent crude traded above $91 per barrel as US-Iran talks remain stalled, raising concerns about energy supplies through the Strait of Hormuz.
Rising oil prices stoked fears that the US Federal Reserve and other major central banks could hike interest rates, weighing on non-yielding gold.
Investors are awaiting the Fed's July meeting minutes, with markets pricing about a one-in-three chance of a September rate hike.
- Who
- Investors and traders on India's Multi Commodity Exchange (MCX), along with the US Federal Reserve and US President Donald Trump.
- What
- Gold and silver prices declined by up to 1% amid profit-booking and fears of interest rate hikes.
- Where
- On the Multi Commodity Exchange (MCX) in India, with global context from Middle East tensions and the Strait of Hormuz.
- When
- Tuesday, 18 August, in early trading around 9:25 AM.
- Why
- Rising Brent crude prices above $91 per barrel stoked fears that the US Federal Reserve and other central banks could hike rates, which weighs on non-yielding gold.
Key facts
- MCX Gold October Futures
- ₹1,55,090 per 10 grams (down 0.55%)
- MCX Silver September Contracts
- ₹2,35,655 per kg (down 1%)
- Brent Crude
- Above $91 per barrel
- US CPI (July, year-on-year)
- 3.4%
- US CPI (July, month-on-month)
- +0.1%
- Fed's Next Policy Meeting
- September 15-16
- July PCE Price Index Release
- 26 August
- Fed July Meeting Minutes
- Due Wednesday
Quotes
Manoj Kumar Jain
Commodity Research Analyst at Prithvifinmart
“Gold has support at $4,440 and $4,400, while resistance is at $4,500 and $4,555 per troy ounce, and silver has support at $65 and $63.60, while resistance is at $67 and $68.80 per troy ounce.”
livemint.com
“Markets now see about a one-in-three chance of a September hike, with investors awaiting FOMC minutes and Fed Chair Kevin Warsh’s Jackson Hole speech.”
livemint.com
Sources
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