Gold prices in India rose sharply on Thursday, tracking the international prices. On the Multi-Commodity Exchange (MCX), the gold contracts rose 0.57 per cent to Rs 48,360 for 10 grams at 0935 hours on December 16. Silver price also witnessed a sharp jump on Thursday. The precious metal future jumped 2 per cent to Rs 61,414 for 100 grams.
Globally, gold prices gained on Thursday. The sudden jump could be attributed to US Federal Reserve’s announcement that it would end its pandemic-era stimulus measures in March. Spot gold rose 0.4 per cent to $1,777.82 per ounce by 04:28 p.m. ET (2128 GMT) while US gold futures settled down 0.4 per cent to $1,764.50, according to Reuters.
As the economy has recovered from the losses due to Covid-19 and nears full employment, the US Federal Reserve had decided to go for a three quarter-percentage-point interest rate hikes by the end of 2022. “The economy no longer needs increasing amounts of policy support,” Fed Chair Jerome Powell said in a news conference. “The pace of inflation is uncomfortably high,” he said, adding, “in my view, we are making rapid progress toward maximum employment.” These two key aspects had convinced all Fed officials, that it is time to exit more fully the pandemic policies put in place two years ago.
“Fed decided to taper the bond tapering with double pace and end it in early 2022 and faster rate hikes. However, their bullishness about the US economy and employment has comforted the traders. These factors will definitely put a pressure on Gold prices but it’s expected to be in sideways zone as the fear of Omicron is still riding the markets. Buy Zone Above – Rs 48,100 for the target of Rs 48,350. Sell Zone Below – Rs 47,900 for the target of Rs 47,600,” Ravi Singh, vice president and head of research, ShareIndia.
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