Gold prices cross ₹60,000 on MCX on fragile US economy

gold prices have crossed Rs 60,000 per 10 gram for the first time ever on mcxthe country’s largest commodity futures exchange.

After a sharp rally last week, gold prices continued their upward march as the appeal of non-yielding gold increased on the back of predictions of less aggressive Federal Reserve rate increasesfollowing the failure of two significant US regional banks.

Prathamesh Mallya, AVP-Research (Non-Agri Commodities, and Currencies), Angel One, said the European Central Bank adhered to its goal to raise interest rates by 50 basis points in order to combat inflation.

This pushed bullion prices in euros to levels not seen since records were set last year, while gold prices in pounds reached a new high, he added.

Ravindra V. Rao, CMT, EPAT, VP-Head Commodity Research, Kotak Securities, said Comex gold futures witnessed a whopping 5.7 per cent rally in the last week, rising for the third straight week, and closed at $1,973 a troy ounce, boosted. by safe haven bids.

The yellow metal started the week on a positive note, as investors rushed for haven assets amid the failure of multiple US banksgiving rise to speculation that the Fed might go for a smaller 25 bps rate hike in the March FOMC meeting.

The shift in short-term interest rates last week was unlike anything seen in more than four decades. US two-year treasury yields plunged from a 15-year high of 5.08 per cent notched on March 9 to a seven-month low of 3.72 per cent on March 15, a fall of a whopping 136 basis points in a span of five days. Meanwhile, Credit Suisse’s top shareholder, Saudi National Bank, ruled out further aid to the former, aggravating the situation and gold prices notched fresh 12-month highs on safe haven appeal.

The SNB-brokered UBS buyout of Credit Suisse during the weekend have calmed markets for now. The FOMC meeting might be the major event for this week, with the Fed expected to hike rates by 25 bps. Powell’s comments and dot projections are going to be crucial, he said.

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