Gold prices fell for a third consecutive session on Thursday following the release of the latest Federal Reserve minutes, which suggested some officials were inclined towards raising interest rates.
Picture: The downside prevails for gold prices as seen in the VT Markets app.
Gold is typically seen as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding gold. There is a possibility that gold could drift back to around $2,355 if the dollar continues its upward trend. The medium to long-term outlook for gold remains constructive, contingent on the next Fed rate move being lower.
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Traders currently see a 72% chance of a rate cut by November 2024, indicating growing doubts about multiple rate cuts within the year.
India’s gold imports in 2024 could decline by nearly 20% from the previous year due to high prices, leading retail consumers to exchange old jewellery for new.
ANZ noted that a sharp price rise might temper discretionary gold buying in 2024, with fewer auspicious days for weddings in India and China possibly acting as a headwind.
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