Gold Prices Near Rs. 52000/10 gm; Fed Policy Statement To Give Direction

Marco Green
September 15, 2020

On the MCX, gold for October delivery rose another 0.45% or 233 points to Rs. 51920.

While the "most dovish scenario of the U.S. Fed is already reflected in the price of gold", the central bank's guidance on how long it could keep rates low and average inflation forecasts are crucial, said ABN Amro analyst Georgette Boele. Spot gold was flat at $1,956.17 per ounce after gaining 1% on Monday.

In the global market, spot gold (Comex) rose to as high as $1,968.80 per ounce on Tuesday, its highest intraday level recorded since September 2, as a softer dollar and expectations the Federal Reserve will reinforce its accommodative monetary policy supported the yellow metal.

"Gold is likely to remain trapped in a range in the near term due to the conflicting forces buffeting the commodity with major headwinds in the form of rising vaccine hopes and positive economic data from major economies", Otunuga said.

Gold prices today jumped to Rs 54,390 from Rs 54,380 per 10 gm, while silver was trending at Rs 67,900 per kg, according to the Good Returns website.

"Gold has witnessed mixed trade reflecting choppiness in equity markets and U.S. dollar index".

Market participants are now looking at the U.S. Fed's two-day policy meeting, which ends on Wednesday.

The dollar index slipped against its rivals after its worst session in more than two weeks, making gold less expensive for holders of other currencies.

Silver gained 0.9% to $27.40 per ounce and palladium was up 0.6% at $2,327.50.

"Amid other factors, gold ETF flows have also been mixed indicating lack of confidence in investors. However, the general bias may be on the upside as United States dollar could remain under pressure ahead of Fed meeting later this week", Kotak Securities added. Gold is often used as a safe store of value during times of political and financial uncertainty.

Other reports by Click Lancashire

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