Gold Futures Fell Nearly 1% To ₹1.38 Lakh/10g As US Inflation Revives Rate Hike Concerns
New Delhi: Declining for the third straight session, Gold futures fell Rs 1,207 to Rs 1.38 lakh per 10 grams on Thursday, as stronger-than-expected US inflation data reinforced expectations of further policy tightening by the Federal Reserve.
On the Multi Commodity Exchange, yellow metal contracts for December delivery traded lower by Rs 1,207, or 0.86 per cent, at Rs 1,38,509 per 10 grams.
"MCX gold futures are facing renewed pressure as stronger-than-expected US inflation data has strengthened expectations of further Federal Reserve tightening," said Vikram Subburaj, CEO at Giottus.com.
A stronger dollar and rising US Treasury yields are further reducing the attractiveness of bullion, he added.
Pinky Yadav, Commodity - Fundamental Analyst at Choice Broking, said domestic investment appetite weakened, with gold-backed exchange-traded fund inflows declining 22 per cent month-on-month to Rs 3,470 crore in October, reflecting cautious investor sentiment.
Retail Inflation Hits 24-Month High Of 6.09%, Food Prices Push It Past RBI’s 6% CeilingThe pressure was equally visible in overseas markets, where Comex gold futures for December delivery declined for the third consecutive session, shedding USD 42.40, or 1.06 per cent, to USD 3,958.10 per ounce, and slipping below the psychologically important USD 4,000 mark.
"Gold slipped below USD 4,000 per ounce in overseas trade to around USD 3,970, as strong US inflation data lifted the dollar and kept rate hike bets by the Fed firmly in place," Akshat Siddhant, Lead Quant Analyst at investment platform Mudrex.
According to Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, sustained purchases by the People's Bank of China and continued central-bank demand are providing a cushion to prices, limiting the extent of the correction.
Investors are now awaiting further US inflation and producer price data, along with commentary from the Federal Reserve, for fresh cues on the interest rate outlook, Modi said.
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