Gold price – pressured by central banks’ hawkish stance – headed for sharp declines

Gold experienced a relatively larger decline last week in the international market, following a string of sluggish sessions this week, and is now headed for its worst quarter in five as the hawkish tone from global central banks continues to dim the metal’s appeal.

In India too, gold prices fell on Thursday, with 10 gram of yellow metal (24-carat) trading at Rs 51,000, and 10 gram of 22-carat gold selling at Rs 46,750. Silver prices too, fell yesterday, with the metal trading at Rs 59,400 per kg.

Spot gold slid 0.3% to $ 1,811.23 per ounce in the US on pace for a third consecutive monthly decline. US gold futures also dropped 0.3% to $ 1,811.50 per ounce in New York. Meanwhile, the dollar index hovered near its recent two-decade peak, and is bound for its best quarter in over seven years, making gold more expensive for overseas buyers.

“Gold is ending lower this quarter due to the tighter Federal Reserve policy suggestions. Also, there’s a good chance that recession worries will bring down demand across commodities,” Jim Wyckoff, senior analyst at Kitco Metals, told Reuters.

The data initially gave traders the idea that since inflation wasn’t any worse than last month, maybe the Fed won’t be so aggressive, helping gold. However, the market is still firmly bearish and speculative sellers jumped in to push prices down. 

Bringing down high inflation will be painful and could even crash growth, but it must be done quickly to prevent rapid price growth from becoming entrenched, the world’s top central bank chiefs said at the European Central Bank’s annual conference in Portugal.

Other precious metals, including silver and palladium saw bigger prices drops, with the latter down 3.6% to $ 1,903.59 an ounce. In Delhi, Kolkata and Bangalore, 10 gram of 24-carat gold is trading at Rs 51,050, Rs 51,000, and Rs 51,020 respectively. Meanwhile, 10 gram of 22-carat gold is selling at Rs 46,750 in Delhi and Kolkata, and at Rs 46,770 in Bangalore. Prices of 10 gram of both 24-carat and 22-carat gold in Chennai was trading slightly higher at Rs 51,090 and Rs 46,830, respectively.

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