Gold Rates In India Fall In The Spot Market, MCX Prices Dip Too

Gold rates in the spot and futures market in India fell today, as global rates fell following a sharp rally last week. Gold Futures on the MCX dropped by almost Rs 300 at Rs 59,100 while spot gold too lost ground by Rs 305.

Today's fall in gold prices in India would have been even more, had the rupee not to fall simultaneously.

In Bangalore 22k gold was trading at Rs 54,750 per 10 grams, a drop of Rs 300 over the previous days levels. 24 k gold too fell and in Bangalore was trading at Rs 6005 per gram. In Chennai 22k gold was at Rs 5560 per gram, while the metal was quoting at Rs 5500 per gram in Delhi and Mumbai.

Gold prices in India largely take cues from global prices of the precious metal, which in turn move largely on the back of interest rates in the US, the Dollar index etc. The recent rally in the precious metal has been on the back of hopes that interest rates rise in the US is easing. When interest rates fall, gold tends to rally, as investors move money away from fixed interest bearing instruments to gold.

According to the CME FedWatch tool, markets are pricing in a roughly 50-50 chance of the Fed maintaining rates at current levels at its May meeting. "Broader trend on COMEX could be in the range of $1970-1995 and on domestic front prices could hover in the range of Rs. 59,500 - 60,300 could be expected," Motilal Oswal said in a report.

Gold may for the moment have run its course and if interest rates across the globe continue to rise, we could see further pressure on gold prices.