Gold Prices Today: Yellow metal trades lower on firm dollar, rate-hike fears

According to Fed Fund futures price, there is an 85-percent probability of a 25 basis points rate-hike by the US central bank in May, while there is a 28 percent likelihood of a similar increase in June.

Gold was trading lower in international and domestic markets as the dollar rose against a basket of major currencies, while rate-hike fears grew among investors.

A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies. This lowers the demand for commodities such as gold and silver.

Data showed that inflation in the UK remained high, raising expectations of more rate hikes in the country. The market also expects the US Federal Reserve to continue raising interest rates at the upcoming meetings, which aided bond yields.

At 10.45 am, the June gold contract on the Multi Commodity Exchange of India was at Rs 60,199 for 10 grams, down 0.2 percent.

Comex gold was at around $2,004.05 a troy ounce, down 0.2 percent from the previous close.

The US Fed’s Beige Book, released on April 19, showed that inflation remained high in the country. This raised more concerns about interest-rate hikes by the central bank at its upcoming meetings in May and June.

According to Fed Fund futures, there is an 85-percent probability of a 25 basis points rate hike by the US central bank in May, while there is a 28 percent likelihood of a similar increase in June.

One basis point is one-hundredth of a percentage point.

Expectations of more interest-rate hikes pushed up the dollar and boosted yields on US treasury bills, which in turn weighed on precious metals such as gold.

Gold today

“Gold is expected to correct lower on firm yields and steady dollar. Market participants look forward to today's US data that include weekly jobless claims, existing home sales and Philadelphia Fed manufacturing index,” said Praveen Singh, currencies and commodities analyst at Sharekhan by BNP Paribas.

Ön Comex, gold has support at $2,004-1,988, while resistance is at $2,035-2,050.

On MCX, the support is at Rs 60,060-59,850 and resistance at Rs 60,500-60, Manoj Kumar Jain, director, Prithvi Finmart, said.

“We suggest selling gold on rise around Rs 60,500 per 10 grams with a stop loss of Rs 60,720 for a target of Rs 60,000,” said Jain.

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