Gold rates reach all-time highs in Hyderabad and other Indian cities after the United States Federal Reserve approved a quarter-point interest rate hike, signalling a return to more traditional interest-rate policy.
In Hyderabad today, gold prices increased by more than 1.1 percent. The current prices for 22-carat and 24-carat yellow metal are Rs 53600 and Rs 58470, respectively.
Meanwhile, the national capital’s 22-carat and 24-carat yellow metal rates are Rs 53750 and Rs 58610, respectively.
The rise in gold prices in Hyderabad and other Indian cities can be attributed to both domestic and international factors. Because India is an importer of yellow metal, international reasons play a major role.
The US Federal Reserve approved a quarter-point interest rate hike on February 1, indicating progress in the Central Bank’s battle against inflation.
Though the Fed indicated that more hikes are needed to control inflation, the central bank is unlikely to go for any larger hikes due to weakening growth.
Interest-bearing assets are becoming less desirable investment options as the Fed shifts to a policy of milder rate hikes. It is causing investors to favour gold.
Domestically, the announcement of a hike in customs duties on gold, silver, and platinum articles increased the cost of precious metal jewellery.
No cut in import duty on gold
As gold prices in Hyderabad and other Indian cities continued to rise, traders demanded a reduction in import duty on the yellow metal.
They believed that the cut in the duty will not only push the sales but also help the government in putting a curb on smuggling.
Despite gold traders’ high expectations, the union budget disappointed them by introducing no changes. The import duty continues to remain at 15 percent.
According to market experts, rates in India are likely to reach Rs 60000 per 10 grams soon.
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