MCX Gold Price slip Ahead of US Fed Policy Decision

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Spot gold trades marginally higher above $1685/oz supported by a pause in the US dollar and bond yields amid positioning ahead of central bank decisions.

The Central Bank will Increase Interest Rates by Another 75 Basis Points: MCX Gold Price slip Ahead of US Fed Policy Decision

Fed’s 0.75% rate hike has been factored in and market players are now assessing the possibility of a surprise move. While some believe there is a possibility of a bigger hike, we believe that the Fed may maintain the pace given signs of improvement in the inflation situation. Amid reduced expectations of a surprise move by the Fed, gold and other commodities have edged up and could see some extended gains.

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Gold prices traded steady on Tuesday with spot gold prices at COMEX were trading near $1676 per ounce in the morning trade. MCX Gold October futures opened firm near Rs. 49438 per 10 gram in line with positive global prices. Gold prices kept range bound trading ahead of the US FOMC meet as the US FED will kickstart two days of meetings from today. The dollar index was marginal down which supported yellow metal to trade firm.

Gold prices traded in a tight range, as investors maintained a cautious stance ahead of this week’s policy meeting by the Federal Reserve where the U.S. central bank is likely to hike interest rates to tame high inflation. The U.S. Fed, at the conclusion of its two-day policy meeting on Wednesday, is expected to raise interest rates by 75 basis points, with markets even seeing a ~20% chance for a 100 bps increase. Gold prices weakened, hovering toward a 29-month low hit on Friday, as the U.S. dollar and Treasury yields firmed on expectations of a hefty Fed rate hike. Dollar index hovered around its 20 year high, while U.S. Yields held close to its highest level in over a decade on Monday. This week apart from the Fed, focus will also be on the BOE policy meeting, speech from Governor Powell and preliminary PMI data points. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.30% to 957.95 tonnes on Monday from 960.85 tonnes on Friday.

Gold and silver prices came off their intraday lows to end marginally lower on Monday lows, as higher U.S. dollar index and rising bond yields limited buying interest in the precious metals to start the trading week. For Tuesday, gold has support at $1645, while resistance is at $1720. Silver has support at $18.90, while resistance is at $20.20. In INR terms gold has support at Rs 48,750, while resistance is at Rs 49,700. Silver has support at Rs 54,740, while resistance is at Rs 58,300.