Gold, silver prices decline after US federal rate cut: Should you buy?
&imwidth=600&imheight=450&format=webp&quality=medium "Gold, silver prices decline after US federal rate cut: Should you buy?")
Tai Wong, an independent metals trader, said that the short-term uptrend in gold may remain intact. Photograph: (AFP file)
Gold, silver prices news: The US Federal Reserve has hinted that two more rate cuts will take place by the end of this year.
The gold and silver rates declined on the MCX because of the rise in the US dollar after the US Federal Reserve cut the federal funding rate by 25 bps. MCX Gold October futures were 0.42 per cent down at Rs 1,09,362 per 10 grams around on Wednesday morning. Silver was down 0.46 per cent at Rs 1,26,403 per kilogram.
The US Federal Reserve has hinted that two more rate cuts will take place by the end of this year. Following the rate cut, the dollar index rose by over 0.20 per cent.
On Wednesday, gold prices fell nearly 1 per cent. Spot gold was down 0.9% at $3,658.25 per ounce, as of 3:11 pm EDT (1911 GMT), after hitting a record high of $3,707.40, reported Reuters. The dip came after gold prices rose six per cent this month.
Tai Wong, an independent metals trader, said that the short-term uptrend in gold may remain intact.
Gold often gains appeal when interest rates fall, as lower yields reduce the opportunity cost of holding the non-yielding asset, according to Reuters.
Gold is considered a safety net against financial uncertainties. Amid geopolitical tensions and tariff wars, gold has surged 39 per cent this year.
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Deutsche Bank has forecast that gold prices can remain at a high of $4,000 per ounce next year.
Should you buy gold?
Experts say investors can keep buying gold.
Anuj Gupta, a SEBI-registered commodity expert, told Mint that the long-term trend of gold and silver will remain positive. "We recommend buying on dips only, not on the current levels," he added. He said that gold prices may be positively impacted in the long term.
Manoj Kumar Jain of Prithvifinmart Commodity Research told Mint that the gold and silver prices may remain volatile this week.