Important view! What World Gold Council says about rising interest rates, cryptocurrency ban impacting Yellow Metal

The yellow metal is still the safe-haven option for many traders amid pandemic however with improving economy and rising interest rates are adversely affecting the Gold movement, while experts predict gold now more lucrative with governments raising concern over cryptocurrency. 

World Gold Council in its April report said, as compared to 2020, the Gold has been weaker in 2021 by five per cent, however, the demand for the same rebounded, particularly in the jewellery and bar and coin markets, in India as well as across the world. 

The recent gold price sell-off has been largely driven by the sharp increase in interest rates in global fixed income markets, says the WGC in a statement. 

An increase in rates is likely to be a by-product of inflation, which may be positive for Gold, mentions WGC, adding further Monetary policy has become an increasingly important driver of gold prices 

On Tuesday, Gold prices extended gains hitting their highest level in over three-and-a-half months, amid weak US dollar and growing inflationary pressure bolstered its appeal as an inflation hedge. 

In this regard, Commodity expert Anuj Gupta of IIFL Securities being bullish on the yellow metal suggests the cryptocurrency crowd will now be diverted to the Gold with China banning the cryptocurrency in the country on Wednesday. 

Similarly, the Fed Reserves' minute release would directly or indirectly impact the price in the yellow metal, says Gupta. The US’ central bank officials have been cautiously optimistic about the US economic recovery. 

The dollar index slipped 0.2 per cent to hit a one-week low against its rivals on Tuesday, which is positive for Gold. The MCX Gold on Thursday has been down around Rs 200, trading at Rs 48500 per 10-gram level. 

Gupta still expects, the yellow metal would breach the Rs 50000 per 10-gram mark subject to external factors and by end of the year the precious metal would reach Rs 53000-54000 per 10-gram level.