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Gold Price Drops Amid US Fed Hawkish Signals, Retail News, Retail ET


Gold prices fall amid hawkish US Fed signals

Gold prices fell on Thursday after hitting a nine-month high, which should boost demand for gold during the wedding season. In the spot market, gold of the highest purity is sold for less than Rs 54,000 per 10 grams.

Colin Shah, MD, Kama Jewelry said “Gold price has dipped below the $1800 mark for a short time, in the domestic market it is trading below Rs 54,000/10 gm. Gold price has dropped due to the action. policy of the US Federal Reserve The Fed raised interest rates by 50 basis points This is the 7th consecutive interest rate hike by the US Central Bank.According to the market, the Fed’s hawkish comment was a surprise.

The ECB and BoE are also expected to raise interest rates, thereby reducing investor interest in gold. “We expect gold prices to trade sideways until H1CY23. Festive demand and global central banks’ pause on interest rate tightening will boost gold demand in H2CY23. However, the climb up Escalation of geopolitical tensions and economic downturn in the West could change the trajectory of gold prices,” added Shah.

MP Ahammed, President, Malabar Group said Gold is an integral part of the socio-economic fabric of the country, and consumers in India have so far demonstrated a tolerance when it comes to buying gold. The yellow metal’s elevated safe-haven status due to geopolitical tensions, central bank rate hikes and inflationary pressures further underpinned consumer sentiment towards gold. Given the fact that the economy is recovering and pent-up demand is driving gold jewelry buy during the ongoing wedding season, the overall increase in demand outstrips the increase in the price of gold. For the October-December 2022 period including festive and wedding seasons, we expect gold jewelry sales to grow 10-12% y/y. The consumer demand outlook looks strong. Today’s consumers take into account gold price fluctuations while planning short-term or future gold jewelry purchases for investment and jewelry.”

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