Gold rate today: Yellow metal, silver drop as Fed policy outcome eyed

NEW DELHI: Gold prices fell on Wednesday as safe haven demand eased after Ukraine said it sees a possible room for compromise in talks with Russia even as Moscow stepped up bombardment. The price fall was, however, restricted ahead of the outcome of the Federal Reserve policy later in the day.

On Wednesday, gold futures on MCX for April delivery were trading at Rs 51,564 per 10 grams, down Rs 201 or 0.39 per cent. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, had fallen 0.2 per cent to 1,061.8 tonnes on Tuesday.

Silver futures for May delivery were trading Rs 428 or 0.63 per cent lower at Rs 68,325 per kg.

At the end of the Federal Reserve’s two-day policy meeting later today, the US central bank is widely expected to raise interest rates by a quarter of a percentage point. The focus will also be on projections showing just how far policymakers think rates will need to rise this year and in 2023 and 2024 to tame inflation, Reuters reported.

Fed Chair Jerome Powell is scheduled to hold a news conference shortly after the policy decision.

Trading strategy
“Gold is likely to continue its negative bias amid a firm dollar and rise in US treasury yields. Also, a retreat in oil prices eased inflation concerns denting demand for safe haven assets. Easing of the producer price index and softening of crude oil prices may provide room for the Fed to go slow on monetary tightening. Investors are also looking for clarity on how the Ukraine-Russia conflict may affect the pace of future tightening,” ICICIdirect said in a note.

For silver, rising Covid cases in China hurt the sentiment.

Rahul Kalantri, VP Commodities at Mehta Equities said international gold has support at $1,905-1,888 per troy ounce and resistance at $1,940- 1,962 per troy ounce. Silver, he said, has support at $24.81-24.64 and resistance at $25.48-25.70.

“In rupee terms, gold has support at Rs 51,050–50,680, while resistance is at Rs 51,950–52,365. Silver has support at Rs67,600- 67,100 while resistance is at Rs 68,880–69,350,” he added.

Global markets
Spot gold was little changed at $1,920.71 per ounce in morning trade, after touching its lowest since March 1 at $1,906 in the last session. US gold futures fell 0.3 per cent to $1,923.90, Reuters reported.

Spot silver was up 0.2 per cent to $24.91 per ounce, while platinum was up 0.1 oer cent to $986.82, the agency reported.