Gold Prices Remain Lackluster on MCX Ahead of US Federal Reserve Policy Outcome
Gold Prices Tread Water Ahead of US Federal Reserve Decision
On Wednesday morning, gold traded lacklustre on the Multi Commodity Exchange (MCX) as investors awaited the US Federal Reserve's monetary policy decision and comments from Fed Chair Jerome Powell on the impact of a potential US-Iran war on economic growth and inflation. At 9:10 am, MCX gold June futures were up 0.03% at ₹1,50,077 per 10 grams, while MCX silver July futures were up 0.34% at ₹2,43,600 per kg.
The US Federal Reserve is expected to keep interest rates unchanged on April 29, as elevated crude oil prices driven by the US-Iran conflict have raised concerns of inflation shooting up, which is already above the central bank's target level. Stalled US-Iran talks are contributing to weak market sentiment, with Brent Crude prices staying above $110 per barrel, supporting the US dollar and weighing on gold prices.
US President Donald Trump claimed on Tuesday that Iran wanted the United States to open the Strait of Hormuz as soon as possible. Meanwhile, Trump is reportedly not happy with Iran’s latest proposals, as they did not address their nuclear program. The ongoing tensions between the two countries are putting pressure on gold prices, which are already facing a challenging environment.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, gold is pressured by stalled US-Iran peace talks and the ongoing closure of the Strait of Hormuz, which has fueled concerns over rising inflation. Investors have increasingly priced in the possibility that central banks may keep interest rates elevated for longer or even tighten further, weighing on non-yielding bullion.
Comparison of Analyst Predictions
| Analyst | MCX Gold June Futures Prediction |
|---|---|
| Jigar Trivedi (IndusInd Securities) | ₹1,50,800 per 10 grams |
| Manoj Kumar Jain (Prithvifinmart Commodity Research) | Support: ₹1,49,200 and ₹1,48,400; Resistance: ₹1,51,100 and ₹1,52,200 |
| Jateen Trivedi (LKP Securities) | ₹1,48,000 to ₹1,52,000 |
In the near term, LKP Securities' expert believes gold may trade between ₹1,48,000 and ₹1,52,000, with a cautious and volatile bias. According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $4,574 and $4,540, while resistance is at $4,640 and $4,681 per troy ounce, and silver has support at $71.40 and $69.80, while resistance is at $75 and $76.60 per troy ounce in today’s session.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Investor Takeaway
Gold prices may remain volatile ahead of the US Federal Reserve's monetary policy decision.
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