Hyderabad: After the United States Federal Reserve approved a quarter-point interest rate hike marking the return to a more traditional interest-rate policy, the gold rates broke all-time high records in Hyderabad and other Indian cities.
Today, the gold rates jumped by over 1.1 percent in Hyderabad. Currently, the rates of 22-carat and 24-carat yellow metal are Rs 53600 and Rs 58470 respectively.
Meanwhile, the rates of 22-carat and 24-carat yellow metal in the national capital are Rs 53750 and Rs 58610 respectively.
The rates in other cities are as follows:
|22K (in rupees)
|24K (in rupees)
Domestic, international reasons for rise in gold rates in Hyderabad, other cities
Both domestic and international reasons are responsible for the rise in gold rates in Hyderabad and other Indian cities. As India is an importer of yellow metal, international reasons play a major role.
On February 1, the US Federal Reserve approved a quarter-point interest rate hike which indicates progress in the Central Bank’s fierce battle with inflation.
Though Fed indicated that more hikes are needed to control inflation, it is unlikely that the central bank will go for any bigger hikes due to weakening growth.
As Fed is moving towards the policy of milder rate hikes, interest-bearing assets are becoming less preferable investment option. It is pushing investors to prefer gold.
At the domestic level, the announcement of hike in custom duties on articles of gold, silver, and platinum made precious metal jewelry costly.
No cut in import duty on gold
Due to continuous hikes in gold rates in Hyderabad and other Indian cities, traders were demanding cut in import duty on the yellow metal.
They were of the opinion 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’ huge expectations, the union budget left them disheartened as no change was introduced. The import duty continues to remain at 15 percent.
As per market experts, soon the rates in India are likely to touch Rs 60000 per 10 grams.