Gold prices remained flat on Wednesday even as oil prices eased and bond yields continued to rise a day after Federal Reserve Chair Jerome Powell said the central bank was prepared to move more aggressively in raising interest rates in its fight against inflation.
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The Russia-Ukraine war could not lift the yellow metal, as investors were optimistic that European Union countries will not impose a ban on oil and gas from Russia. Higher yields and interest rates tend to increase the opportunity cost of holding non-interest paying gold.
In the international market, gold was trading at $1923.9, a rise of 0.12%.
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“Geopolitical tension, higher crude oil prices and inflation are the major factors for supporting the yellow metal,” said Anuj Gupta, VP-Research, IIFL Securities.
Gold futures were trading at Rs 51,313.00 per 10 gm, down 66 points or 0.13%, on the MCX. Silver futures were trading at Rs 67,543.00 per kg, down 149 points or 0.22%.
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Platinum in the global market was trading at $1,020.69 while palladium was trading at $2,564.96.
Copper futures were trading at Rs 812.50, down 0.27%, while nickel and aluminium futures were trading at Rs 2,130.00 and Rs 280.35 a kg, respectively, on MCX.
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West Texas Intermediate (WTI) crude oil for April delivery lost 36 cents, or 0.3%, to settle at 111.76 dollars a barrel on the New York Mercantile Exchange on its expiration day. Brent crude for May delivery decreased 14 cents, or 0.1%, to close at 115.48 dollars a barrel on the London ICE Futures Exchange.
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Bond yields rose strongly for the second day in a row, suggesting predictions of more aggressive interest rate rises by the Federal Reserve as the central bank attempts to tamp down the strongest inflation in decades. The 10-year Treasury yield increased to 2.38% from 2.30% late Monday. The yield, which determines mortgage and other consumer loan interest rates, was 2.14% on Friday.