Perspective on Gold by Ashish Rajodiya, Head – Commodities, PL Capital
Below the Perspective on Gold by Ashish Rajodiya, Head – Commodities, PL Capital
Gold Slips to Rs 1,50,500 as Treasury Yield Surge Overwhelms Safe-Haven Bid.
MCX Gold (December contract) is trading at Rs 1,50,500 per 10 grams, down Rs 2,700 or 1.80% today, extending its slide for a second straight week. The pressure is coming from a sharp US Treasury bond selloff — the 10-year yield at 5.13%, its highest since 2007, and the 30-year at 5.44%, its highest since 2004 — as CME FedWatch data shows markets now pricing a 68.1% probability of a 25-basis-point Federal Reserve rate hike at the October 28 meeting, up from just 31.9% odds of holding steady, on the back of strong economic data and energy-driven inflation concerns tied to the ongoing US-Iran standoff over the Strait of Hormuz. Elevated crude prices, rather than boosting gold's safe-haven appeal as they typically would during geopolitical stress, are instead reinforcing the case for further Fed tightening, feeding a stronger dollar and steeper yield curve that both work against non-yielding bullion. Gold has support at Rs 1,48,000 and Rs 1,46,000, with resistance at Rs 1,52,500 and Rs 1,55,000. The metal's next move likely hinges on two threads converging at once: the Fed's October rate decision, and whether the recent signs of renewed US-Iran diplomatic engagement on Hormuz firm up into an actual de-escalation. A dovish surprise from the Fed or confirmed progress on Iran talks could spark a sharp bounce toward resistance, while continued hawkish signals or a stalled Iran negotiation would likely extend the slide toward the lower support band.
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