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Below Commentary On Gold By Mr. Navneet Damani, Senior VP – Commodities Research, Motilal Oswal Financial Services

“Gold caved under pressure from aggressive rate hike expectations as the U.S. dollar and Treasury yields climbed. After a few key macro releases this week, including hotter-than-expected inflation data and better-than-projected retail sales, the expectations of further rate hike tightening grew further. U.S. retail sales unexpectedly rebounded in August, but demand is cooling as the Federal Reserve aggressively raises

interest rates to fight inflation. With retail sales, we also had U.S. weekly jobless claims data which showed a fall last week. The current probability by CME Fed watch tool shows a 78% expectations for 75bps rate hike and 24% for a 100 bps. Along with Fed tightening measures, there is continuous sell off seen in gold and silver ETF'S which is also hurting the overall sentiment. Focus today will be on Michigan inflation expectations.

Broader trend on COMEX could be in the range of $1640-1705 and on domestic front prices could hover in the  range of Rs. 49,000 – 49,700 could be expected.”  

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