Retail Gold Rate Slips Below Rs 75,000, MCX Rates Edge Lower After RBI Keeps Status Quo
The 24-karat gold was priced at Rs 74,834 per 10 gram, as per the India Bullion and Jewellers Association Ltd. This is 1.2% lower than the closing price of Rs 75,726 on Tuesday.
Gold rates in the retail market slipped below the Rs 75,000 mark on Wednesday after the Reserve Bank of India kept the benchmark lending rates unchanged.
The 24-karat gold was priced at Rs 74,834 per 10 gram, as per the pan-India rate shared by the India Bullion and Jewellers Association Ltd. This marked a decline of 1.2% as compared to the closing price of Rs 75,726 on Tuesday.
Apart from the retail gold price, the metal's futures also edged lower on the Multi Commodity Exchange. The futures for December delivery touched a low of Rs 74,969 per 10 gram, down 0.27% from the last closing price.
Similarly, silver was also edging lower in the retail market, as it slipped below the Rs 90,000 mark. The metal was trading at Rs 88,290 per kg, down 2.35% as compared to the closing price of Rs 90,412 per kg on Tuesday.
The RBI's refrain from initiating the rate reduction cycle is seen as one of the reasons behind gold edging lower. The metal, seen as a safe-haven asset, usually witnesses a spurt in demand from investors when interest rates are lowered.
The central bank's monetary policy committee decided by a 5:1 majority to keep the key repo rate unchanged at 6.5%. However, the MPC changed the stance to "neutral," paving the way for likely rate cuts in the future.
Comex Gold Price Falls
The slip in the precious metal rates in the Indian market was preceded by a plunge in the prices at the Commodity Exchange. After rising sharply in the past week, gold and silver futures trading on the Comex slipped to three-week lows on Tuesday.
Gold futures at the Comex had dropped as low as $2,623.4 an ounce before partially recovering to close at $2,635.4. Silver declined 4.4% to close at $30.6 an ounce.
The fall in Comex gold price was triggered by "reduced expectations of a significant 50-basis point interest rate cut by the Fed in November," analysts at Kotak Securities Ltd. said in a note.
The rates also softened on "reduction in geopolitical risks" as Lebanese militant group Hezbollah reportedly expressed its openness for a ceasefire with Israel, they added.
