Fed Rate Hike Concerns Weigh on Gold and Silver Prices
The US Federal Reserve's upcoming interest rate hike has sparked concerns that gold and silver prices may correct downwards. According to Ajay Kedia, MD of Kedia Commodities, if the Fed goes ahead with a rate hike by mid-September, gold prices could drop to $4150 per ounce, while silver could slide to $58 levels. This would be a negative trend for precious metals.
The Fed's decision is influenced by the recent jobs data and inflation numbers. Strong job data has strengthened the case for a 0.25% rate hike, which could lead to higher interest rates and subsequently lower demand for gold and silver. Kedia also pointed out that the rupee appreciation in the past 15-20 days has undervalued gold and silver.
Kedia expects the prices of gold and silver to move up after a correction, with gold potentially reaching $5000 per ounce by year-end and silver at $90 levels. This could be a buying opportunity for investors as the festive season demand is expected to support gold and silver prices.