Bullion market continued to downward trend in domestic and international market on Thursday, October 22 amid elevated crude prices, and higher US bond yields rates. Gold futures, December 4 expiry on Multi Commodity Exchange (MCX), plummeted Rs 1,800 to an early low at Rs 1,44,212 per 10 grams as compared to last day's closing of Rs 1,46,079.
"The domestic decline mirrors the global sell-off, although MCX gold is holding up better than MCX silver amid broader yield-driven weakness in precious metals," said Ponmudi R, CEO of Enrich Money.
Similarly, the silver contract, due to expire in December, nosedived Rs 5,600 to an early low at Rs 2,03,559 per kilogram from the last close of Rs 2,09,168.
Gold, Silver Rates In International Market
Last seen, COMEX Gold, December Expiry, was trading at $4,107.90 per ounce, down $42.10 or 1.01 per cent. COMEX Silver was quoted at Rs $56.42, falling $1.29 or 2.24 per cent.
Why Bullion Market Crashed Today
1. Middle East Tension And Elevated Crude Prices
The conflict between the US and Iran does not seem to be cooling down. A renewed tussle in Middle east which has fuelled Inflation concerns as Brent crude is trading over $110 per barrel.
2. Fed Rate Hike Concern
Market participants continue to anticipate a potential Fed rate hike ahead amid persistent energy-driven inflation. In India, the current retail inflation is above 5 per cent. Wholesale inflation is significantly high as well.
3. Higher US Bond Yields
The US 10-year and 330-yearbond yields continue to remain above 5 per cent, weighing on demand for gold in the spot market.