Chennai: Gold and silver prices sharply rebounded on Wednesday as the US dollar weakened after Democrats swept the US midterm elections.
International spot gold price jumped 2.97% to $4,044.90 an ounce, while silver jumped 4.27% to $51.90 per ounce. In MCX gold prices moved up Rs 3870 per 10 gm to Rs 142957 and silver prices moved up Rs 9822 per kg to touch Rs 1,87,422.
In the Delhi bullion market, gold was trading at Rs 146,600 per 10 gm and silver Rs 193,000 per kg.
The rebound was seen after the US dollar declined following the victory of Democrats in Republican strongholds in the mid-term polls in the US. The dollar dropped from 102.80 to 101.50 on Wednesday.
“After the victory of Democrats, there could be pressure on US President Donald Trump on a course correction in key issues, including economic sanctions and the West Asia crisis. If Trump yields to the pressure, the Iran war may ease and this would bring down crude oil prices,” said Ajay Kedia, MD, Kedia Commodities.
Crude prices have been pushing inflation up and forcing the US Federal Reserve to go for interest rate hikes. Once the inflation pressure eases, the Fed may go easy with rate hikes. The market has already priced in a 0.25% rate hike in December. If the Fed decides not to go for a steeper hike, the scenario will turn beneficial for both gold and silver.
If the Fed goes for a rate pause by March, the precious metal may resume their bull run. In that case, the dollar too may ease to 97.50 -98 levels.
However, much will depend upon the decision the Trump administration takes going ahead.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: deccanchronicle.com
