The minutes of the US Fed’s July 26-27 policy meeting are due at later in the day. The US central bank has raised its benchmark overnight interest rate by 225 basis points since March to tame high inflation.
Gold futures on
were trading flat, marginally lower by 0.05 per cent or Rs 23 at Rs 51,809 per 10 grams. However, silver futures dropped 0.18 per cent or Rs 102 at Rs 57,563 per kg.
Despite signs of easing inflation in the world’s largest economy, Fed officials have maintained a hawkish tone on future rate hikes that has led to a pullback in gold prices.
Gold prices have taken a hammering in the last few days, as it seems to be losing its safe haven ground to USD once again, said Pritam Patnaik, Head – Commodities, Axis Securities.
“While another round of steep rate hikes is on the cards, the market wants to know if it will be a 50 or 75 basis point,” he added. This has brought the US dollar and US Treasury bulls back to the forefront, causing the gold prices to retreat.”
In the spot market, the highest purity gold was sold at Rs 52,061 per 10 grams while silver was priced at Rs 57,721 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The spot prices of gold have jumped more than Rs 1,650 per 10 grams in one month, whereas silver gained about Rs 3,000 per kg in the same period under review.
Ravi Singh, Vice President and Head of Research, ShareIndia said gold prices have declined on account of a stronger dollar amid a disappointing set of economic data out of China and a surprise rate cut by the country’s central bank.
“If the FOMC minutes provide signs of further hawkishness, it could further enhance the appeal of the dollar, pushing gold downwards,” he added.
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,760 and resistance at $1,790 per ounce. MCX Gold October support lies at Rs 51,500 and resistance at Rs 52,200 per 10 grams,” said Tapan Patel, Senior Analyst (Commodities),
Spot gold was flat at $1,775.91 per ounce after hitting its lowest since August 8 at $1,770.86 on Tuesday. US gold futures edged 0.1 per cent higher to $1,791.10.
Spot silver eased 0.1 per cent to $20.09 per ounce, platinum fell 0.1 per cent to $933.86, and palladium was steady at $2,152.33.
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