Gold prices traded cautiously in early sessions on Tuesday, with investors maintaining a watchful stance ahead of the upcoming US Federal Reserve interest rate announcement. The Federal Reserve’s policy decision, scheduled for Wednesday, comes at a time when the American job market is showing signs of slowdown and the current inflation rate remains above the Fed’s 2% target.
During the morning trading hours, gold on the MCX was valued at Rs 1,29,320, marking a 0.49% decline, while silver was trading at Rs 1,80,734, down by 0.55%.
Market experts indicated that investors are awaiting clearer signals from the Federal Reserve before making any significant moves in the market. Rahul Kalantri, VP Commodities at Mehta Equities Ltd, mentioned that there was a slight profit-taking trend among traders as they awaited the Federal Open Market Committee (FOMC) meeting and an expected rebound in US 10-year yields.
Kalantri highlighted that market sentiment weakened following reports that the US Producer Price Index (PPI) data for October and November, initially scheduled for release this week, would now be postponed until January. This delay has increased uncertainty regarding inflation and the Federal Reserve’s future policy stance.
He also pointed out that consistent gold purchases by China for the 13th consecutive month, along with limited physical silver supply, could provide support to prices. Kalantri outlined gold’s support levels at $4,165–4,135 and resistance levels at $4,230–4,265. In the Indian market, he mentioned support at Rs 1,29,250–Rs 1,28,450 and resistance at Rs 1,30,750–Rs 1,31,100.
Despite the minor dip observed on Tuesday, some analysts maintain a positive outlook on the broader trend. Ponmudi R, CEO of Enrich Money, emphasized that precious metals are still exhibiting a strong bullish bias, supported by continuous ascending price patterns over several months.
He noted that corrective price dips are consistently met with aggressive buying near lower trendline supports, indicating a pattern of sustained higher highs and higher lows, thus reinforcing medium-term bullish control.
Ponmudi R pointed out that MCX Gold (Feb) is currently hovering around Rs 1,29,952, closely mirroring the global uptrend while benefiting from rupee depreciation. He highlighted the Rs 1,29,200 level as a crucial short-term support, suggesting that as long as this level holds, gold could potentially move towards the Rs 1,30,000–Rs 1,31,000 range.
With all eyes on the Federal Reserve, the market is anticipated to remain range-bound until the Federal Reserve’s assessment of inflation and future rate adjustments are unveiled. The policy outcome is expected to significantly influence the trajectory of gold and silver prices in the days ahead.