Gold and silver prices were rangebound in morning trade on the MCX on Tuesday, 15 September, amid a rise in the US dollar and bond yields ahead of the monetary policy decisions of the US Federal Reserve.
MCX gold October futures were 0.15% up at ₹1,51,450 per 10 grams, while MCX silver December futures were 0.09% down at ₹2,32,480 per kg around 9:10 PM.
The dollar index climbed by 0.20%, while 10-year bond yields topped 5% for the first time since October 2023, eroding gold’s safe-haven appeal.
The rise in the dollar and bond yields can be attributed to expectations of rate hikes by the US Federal Reserve, as inflation concerns continue to grow.
Oil prices remain above $107 per barrel, bolstering concerns over inflation, as Iran-aligned Houthis launched missile and drone attacks on Saudi cities, injuring 13 civilians, while Houthi forces continued their advance along Yemen’s Red Sea coast.
The Fed factor
The Fed will announce its policy decision at 11:30 PM IST (India Standard Time) on Wednesday, following a two-day meeting.
Most experts believe the US central bank will lift its benchmark rate by 25 basis points to 3.75%-4.00% range as the Fed’s favoured gauge of inflation- the US personal consumption expenditures (PCE) price index- has been above the Fed’s long-term 2% inflation target for 65 straight months.
Meanwhile, US CPI for August rose 3.4% year-on-year and 0.3% month-on-month, bolstering prospects for interest rate hikes.
Gold prices tend to decline in periods of higher rates, as it is a non-yielding asset.
Manoj Kumar Jain of Prithvifinmart Commodity Research said MCX gold has support at ₹1,50,150 and ₹1,49,400 and resistance is at ₹1,52,400 and ₹1,53,650, while silver has support at ₹2,30,300 and ₹2,28,000 and resistance is at ₹2,36,000 and ₹2,38,800.
“We suggest long-term investors could accumulate gold and silver in a staggered way in this market fall, but traders must wait for the FOMC meeting outcomes for taking fresh positions in gold and silver,” said Jain.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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