NEW DELHI: Gold price little changed on Wednesday ahead of the Federal Reserve’s outcome as investors stayed cautious over the outlook for the bullion.
The US central bank is widely expected to raise interest rates by another 75 basis points (bps) at the conclusion of its policy meeting on Wednesday, as it attempts to tame runaway inflation without triggering a recession.
Gold futures on
were trading flat, marginally down by 0.07 per cent or Rs 36 at Rs 50,548 per 10 grams. However, silver futures dropped by 0.18 per cent or Rs 96 at Rs 54,619 per kg.
The dollar slipped for the fourth straight session, down 0.2 per cent against its rivals, making gold less expensive for buyers holding other currencies. Rising interest rates increase the opportunity cost of holding non-yielding bullion.
Pritam Patnaik, Head – Commodities, Axis Securities said today’s Fed rate decision and the Fed chairman‘s statements will establish the gold rate trajectory in the coming days.
“The market feels given the vulnerable situation that the global economy is currently in, the Fed will choose its words and monetary stance carefully. The Fed is expected to continue to raise rates, but at a gradually diminishing pace,” he added.
In the spot market, the highest purity gold was sold at Rs 50,760 per 10 grams while silver was priced at Rs 54,155 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped about Rs 800 per 10 grams in the last three sessions, whereas silver has rallied more than Rs 550 per kg in just the same number of sessions.
Gold prices are slowly pulling upwards amid high inflationary pressure, geo-political tensions and global growth worries, said Ravi Singh, Vice President and Head of Research, ShareIndia.
“The consolidation in gold may continue unless there are fresh triggers, however, gains in US dollar and the expectation of 75 bps rate hike by Fed is keeping pressure on prices,” he added.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,702 and resistance at $1,730 per ounce. MCX Gold August support lies at Rs 50,200 and resistance at Rs 51,000 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Spot gold was nearly flat at $1,716.59 per ounce. US gold futures dipped 0.2 per cent to $1,713.90.
Spot silver dipped 0.1 per cent to $18.61 per ounce, platinum fell 0.3 per cent to $870.77, and palladium firmed 0.5 per cent to $2,019.91.
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