Gold and Silver Prices May Correct on Fed Rate Hike Expectations
Market analysts predict that gold and silver prices may soon experience a correction due to increasing expectations of a Federal Reserve interest rate hike in mid-September.
The US Federal Reserve is set to meet on September 15, and recent jobs data has strengthened the case for a 0.25 percent rate increase. If inflation numbers show a spike this Friday, the Fed may proceed with the rate hike, according to Ajay Kedia, MD of Kedia Commodities.
Kedia noted that much depends on the inflation data, which will determine whether the Fed prioritizes taming inflation or continues to focus on economic health. A rate hike would be negative for precious metals, causing gold prices to drop below $4400 per ounce and silver closer to $65.50 per ounce.
Domestically, gold prices could fall from Rs 1,52,000 levels to Rs 1,41,000 levels, while silver may slide from Rs 2.50 lakh per kg to Rs 2.20 lakh per kg. Kedia suggests that these levels could be good buying opportunities for investors.
Although the market is anticipating a correction, Kedia remains optimistic about gold and silver's potential performance by year-end, predicting they will rise to $5000 and $90 respectively.