Gold rate today: The domestic gold futures kicked off the evening trade on the Multi Commodity Exchange (MCX) on a tepid note, tracking the weakness in the international markets as the US dollar strength outweighed the geopolitical risks stemming from US-Israeli military action against Iran.
MCX gold futures for April expiry opened with a 3% cut at ₹161,092 per 10 grams as against its last close of ₹166,074. MCX was closed for trading in the morning session on account of a public holiday to mark the festival of Holi.
At the same time, silver prices on MCX traded with a steeper decline of 6% as it traded at ₹261,773 per kilogram.
The weakness in the domestic futures market mirrored the global market trend, wherein US spot gold prices briefly slipped below the $5,200 mark as they cracked 3%, and silver faced an even bleaker fate with its 11% crash to below the $80 level at one point.
Why are gold and silver prices falling?
Additionally, fading expectations of an interest rate hike in the US by the its central bank in the near term is another factor weighing on domestic and international gold prices.
Since gold in a non-yielding asset it thrives in a low interest rate environment. According to a Reuters report, the US Federal Reserve to hold rates at the conclusion of its next two-day meeting on March 18, suggests CME Group’s FedWatch tool. The probability of a rate hold in June, previously below 45%, has now risen to more than 60%.
