Gold prices lingered near recent lows on Wednesday in the international markets as investors prepared for the likelihood of another super-sized interest rate hike from the US Federal Reserve in its effort to tame soaring inflation.
Spot gold was flat at $1,663.73 per ounce, as of 0126 GMT. Bullion hovered close to $1,653.10, its lowest level in more than two years marked last week.
At 9:33 am, gold contracts were trading 0.03 percent higher on the Multi-Commodity Exchange (MCX) at Rs 49,188 for 10 grams and silver added 0.47 percent at Rs 56,610 a kilogram.
Pritam Patnaik, Head - Commodities, HNI and NRI Acquisitions, Axis Securities
The prospects of an aggressive rate hike and expectations of continued hawkish policy stance going forward, have spooked the gold traders. Coupled with this, the dollar index trading close to its recent highs and buoyant bond yields, bullion prices have come under further price pressure.
The US Fed is expected to announce a hike of 75 basis points, making its fifth continuous hike this year. What the market will closely watch for is the post event commentary. With Fed’s earlier proposed indicated target rates of 4.25% by 2023 , not too far off , will the Fed take an express route to these numbers of will reduce the pace of the hike, is to be seen. That in turn will provide guidance to the gold price trend. With the probability of a 100 basis point being close to only 19%, it has set the acts amongst the pigeons. Do expect extreme volatility for the day.
Rahul Kalantri, VP Commodities, Mehta Equities
Gold and silver prices ended marginally lower on Tuesday ahead of the US Federal Reserve monetary policy meeting. A likely hawkish monetary stance from the US Federal Reserve and other major central banks of the world have cast a pall over the stock and financial markets, but have boosted US Treasury yields and the US dollar index—both of which are restricting the safe-haven metals.
Gold has support at $1655-1648, while resistance is at $1676-1788. Silver has support at $19.05-18.85, while resistance is at $19.42-19.55. In rupee terms gold has support at Rs 49,040-48880, while resistance is at Rs 49,510, 49,660. Silver has support at Rs 55,750-55,240, while resistance is at Rs 57,180–57,510.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices traded steady on Wednesday with spot gold prices at COMEX were trading near $1663 per ounce in the morning trade. Gold prices kept range bound trading as market is awaiting US Fed decision over interest rate. A rate hike of 75 bps is already discounted in the market while larger rate hike will be a surprise.
We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1640 and resistance at $1680 per ounce. MCX Gold October support lies at Rs 48,800 and resistance at Rs 49,700 per 10 grams.
Nirpendra Yadav, Senior Research Analyst at Swastika Investmart
Gold and silver prices remained down as US benchmark treasury yield gained 2.75% ahead of FOMC meeting output scheduled later the day. Rising bond yield supports the US dollar index which weighs bullion prices. Today's trend in bullion may remain down and any rise in prices towards resistance levels may witness selling pressure. Gold has resistance at Rs 49500 and support at Rs 48900. Silver has resistance at Rs 57200 and support at Rs 55300.Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.