Gold Prices React to Fed Rate Hike with Mixed Results
The US Federal Reserve's decision to raise interest rates by 25 basis points has had a mixed impact on gold prices. On the MCX, gold futures fell 1.11% to Rs. 1,50,778 per 10 grams, while September silver futures declined 1.19% to Rs. 2,31,982.
The decline in gold prices is attributed to inflation concerns and high energy prices, which have increased the value of the US dollar. This, in turn, has made gold more expensive for investors.
However, US gold prices rose more than 1% on Thursday as investors digested the Fed's interest rate hike and its signal that further policy tightening may follow. Spot gold was up 1.1% at USD 4,310.49 per ounce.
Kelvin Wong, senior market analyst at OANDA, expects gold to remain range-bound until oil prices continue to decline, which could support gold prices moving higher in the medium term.