US inflation data dents mood in bullion market; Sell MCX Gold, Silver futures, says analyst

Core inflation in US remained at a four decade high at over 8 per cent in September and would likley trigger further interest rate hikes by the Federal Reserve. In effect US Dollar will likley strengthen against other currencies. As Gold and Dollar Strength move inversely, this does not augur well for the yellow metal. The data spoiled mood in the commodity markets as bullion prices dropped sharply in the international and domestic markets.

At 8:21 pm on Thursday, MCX December Gold Futures were trading at Rs 50540 per 10 gram and were down by Rs 365 or 0.72 per cent. Meanwhile, the December Silver futures were trading down by Rs 835 or 1.46 per cent at Rs 56490 per kg.

Commodity and currency expert Anuj Gupta recommends a sell on Gold and Silver futures. Gupta, who is Vice President (VP), Commodity and Currency Research at IIFL Securities suggested a Sell on December Gold futures for the price target of Rs 49500 to 50000. As for Silver futures Selling is recommended for target price of Rs 54000 to 55000, he further said. 

Internationally, the price of Gold is expected to hit USD 1600 while Silver at USD 18.

 Source: Reuters

Gupta said that the US Fed is expected to raise interest rate by 75bps in the next monetary policy.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)