Gold prices fell by 1.45% last week as a result of the strong US dollar and the US Fed's hawkish stance on interest rate hikes. On the Multi Commodities Exchange (MCX), the gold future contract for April 2023 finished at Rs. 55,416 per 10 gm, down Rs. 3,431 from its lifetime peak of Rs. 58,847 per 10 gm. In the last week, the price of yellow metal fell from USD 1,841 to USD 1,809 per ounce on the international market, a 1.68 percent weekly loss. The US dollar increased 105 levels last week and closed at 105.195 levels on Friday, recording an intraday gain of 0.63 percent for the weekend session.

Gold prices have reportedly broken through their prior support, which was located around USD 1,820 levels, and their current immediate support in the international spot market is set between USD 1,785 to USD 1,780 levels. In the local market, the Rs. 55,500 support level has been broken, and now Rs. 54,500 per 10 gm levels are the nearest points of support for the precious bullion metal. Nevertheless, 52,700 is anticipated to continue serving as a reliable support level for the golden yellow metal. They said that the dollar index reached a peak of 105 and that the gain from 103 to 105 in one fortnight was the result of hawkish US Federal Reserve policy. According to experts, the US Central Bank's rising borrowing costs have raised the potential cost of investing in metal, which is another reason why gold prices are declining.

Last week, Gold price reportedly fell as the Fed's monetary policy intentions were left vague in the meeting minutes. Investors are now looking to economic data for more monetary policy clues.  According to the minutes of the Fed's February meeting, the majority of the members of its monetary policy committee support raising interest rates this year as long as inflation stays more steady than expected."

When discussing the causes of the decline in the price of gold, market expert Sugandha Sachdeva said, "Because gold does not pay interest, higher interest rates raise the opportunity cost of holding gold and make it less desirable as an investment. The US Q4 2022 GDP was revised to show an annual growth of 2.7 percent, which is somewhat less than the previous estimate of 2.9 percent. The Fed's preferred inflation indicator, the core personal consumption index, climbed at the fastest rate in six months, exceeding forecasts."

The core inflation reportedly surged by 0.6 percent sending the annual reading higher to 4.7 percent in January, compared to an anticipation of 4.3 percent, which spurred further rise in the dollar index. As the dollar has been rising over the past four weeks, investors have been choosing the safety of the dollar over gold.

PM seeks investments in green energy, says potential ‘No Less Than Gold Mine’

Stock, Commodity Outlook: Gold gains Rs90; silver jumps Rs113

MCX Gold, Silver, Copper Price Watch, February 15