Gold prices began the day with a modest decline on Wednesday, yet they stayed near historic peaks, buoyed by robust market sentiment in anticipation of the U.S. Federal Reserve’s crucial interest rate decision later today. On the Multi Commodity Exchange, October gold futures were priced at Rs 1,09,870 per 10 grams, reflecting a decrease of Rs 286 or 0.26%, following a peak of Rs 1,10,666.
In light of the slight decrease, the yellow metal continues to enjoy solid support as investors await indications from Fed Chair Jerome Powell regarding the forthcoming trajectory of rate reductions. In the meantime, silver December futures experienced a more pronounced decline, with prices on MCX decreasing by Rs 1,330 or 1.03% to Rs 1,27,490 per kilogram. On a global scale, the dollar experienced a decline, stock indices saw a slight decrease, and gold attained new peaks as market participants anticipated the Federal Reserve’s anticipated rate cut and insights regarding the tempo of forthcoming easing measures. The Federal Reserve is anticipated to reduce its key interest rate by 25 basis points, bringing it to the range of 4.00%-4.25% at the conclusion of its monetary policy meeting later today. The primary emphasis, aside from the rate decision, will be on Chair Jerome Powell’s remarks regarding the future of U.S. monetary policy.
On Tuesday, gold and silver concluded the day with a modest decline in the domestic market, while exhibiting a varied performance in the international markets. The October futures contract for gold concluded at Rs 1,10,156 per 10 grams, reflecting a decline of 0.02%. Meanwhile, the December futures contract for silver settled at Rs 1,28,820 per kilogram, marking a decrease of 0.47%. Gold and silver exhibit significant price fluctuations and increased their values during the initial trading session, yet failed to maintain those gains in light of advancements in US-India trade discussions and in anticipation of the FOMC meeting results. Gold prices reached an unprecedented peak in light of potential Federal Reserve rate reductions, while silver prices retreated from their recent 14-year high due to profit-taking at elevated levels. “The dollar index and U.S. 10-year bond yields experienced a decline, influenced by the robustness of the Euro and potential cuts in Federal Reserve rates, which in turn bolstered the prices of gold and silver. However, the strength of the rupee restricts the potential gains of gold and silver in the domestic markets,” stated Manoj Kumar Jain.
Today, the US Dollar Index was hovering near the 96.72 mark, gaining 0.09%. “We anticipate fluctuations in gold and silver prices this week due to the instability in the dollar index, updates on the US-India trade agreement, and the results of the FOMC meeting. Gold is projected to trade between $3,534 and $3,800 per troy ounce, while silver is expected to range from $41.40 to $44.50 per troy ounce this week,” he stated.