Weekly Gold Review: MCX Gold Drops Well Under Rs 50K Mark

24 Sep 2022 , 12:49 PM

Gold extended its losing streak as rising global interest rates and lack of fund buying pulled the metal lower on a sustained basis. In a key decision on 21st September 2022, the US Federal Reserve announced its highly anticipated monetary policy verdict, raising interest rates by another three-quarter of a %age point. Citing its dual goals of maximum employment and inflation at a rate of 2 % over the longer run, the Fed decided to raise its target range for the federal funds rate by 75 basis points to 3 to 3.25 %. The move marks the third straight 75 basis point rate hike by the Fed and lifts rates to their highest level since early 2008. With inflation remaining elevated, the Fed also said it anticipates that ongoing interest rate increases will be appropriate. The US Treasury yields continued their upward trajectory with the aggressive approach of the US Fed, sending the 10- and 30-year rates to levels last seen a decade ago. The Fed policy-sensitive 2-year rate also spiked further above 4%. In India too, the benchmark 10 year bond yield soared above 7.30% mark as a recovery from 7.10% continued. Meanwhile, the US dollar index extended its wild upmove as the Fed signaled more monetary tightening and broke above 112 mark to hit fresh two decade high. This ensured that COMEX Gold tanks near a 27 month low of $1650 per ounce as the commodity extended a drop under $1700 per ounce mark. MCX Gold futures also dropped well under Rs 50000 per 10 grams though the losses were somewhat curbed on a sharp slide in the Indian Rupee that hit record lows above 81 per US dollar mark.Powered by Commodity Insights