Gold prices in India traded sharply lower on the Multi Commodity Exchange (MCX) Thursday following weakness in international spot prices after the US Federal Reserve signalled to raise interest rates sooner than expected.

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At 11:10 am, gold futures for August delivery fell 1.64 percent to Rs 47,711 per 10 grams as against the previous close of Rs 48,506 and the opening price of Rs 48,250 on the MCX. Silver futures traded 1.66 percent lower at Rs 70,281 per kg. The prices opened at Rs 71,000 as compared to the previous close of Rs 71,468 per kg.

“Gold prices tumbled after the Federal Reserve pencilled in two interest rates hikes by the end of 2023. The Federal Reserve kept interest rates and monthly bond-buying steady, though signalled that it could hike rates sooner than previously expected. Higher yield in 10-year bond prices, a strong US dollar, hawkish Fed demeanor will keep yellow metal as sell on rise market,” said Sandeep Matta, Founder, TRADEIT Investment Advisor.

The Fed on Wednesday began closing the door on its pandemic-driven monetary policy with 11 out of 18 Fed officials projecting at least two quarter-point interest rate increases for 2023, said a Reuters report.

“Gold on MCX is also expected to remain weak due to Fed’s deemed hawkish statement however will find its major support around Rs 48,000 levels where it will be in oversold zone and contra trade can be initiate from these levels,” Matta added.

International gold prices rose on Thursday as investors took advantage of a sharp fall in the previous session to buy the metal after the US Federal Reserve signalled it might raise interest rates sooner than expected, said a Reuters report.

Spot gold was up 0.6 percent at $1,822.36 per ounce. US gold futures were down 2 percent at $1,824.70 per ounce.

Gold is seen as a hedge against inflation, but an increase in rates from the Fed will dull bullion's appeal as it translates into a higher opportunity cost of holding it.

Amit Khare, AVP- Research Commodities, Ganganagar Commodities said that gold and silver were showing some profit booking on daily as well as weekly technical chart and yesterday huge profit booking was seen.

August Gold: Support 1 – Rs 47,300, Support 2 – Rs 46,800; Resistance 1 – Rs 48,620, Resistance 2 – Rs 48,800

July Silver: Support 1 – Rs 69,800, Support 2 – Rs 68,500; Resistance 1 – Rs 71,800, Resistance 2 – Rs 72,300

Here are gold rates across major cities:

Here are silver rates across major cities:

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