Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices in India were trading flat to negative on Wednesday, ahead of the US Federal meeting. On Multi Commodity Exchange, gold August futures were ruling Rs 57 or 0.1 per cent down at Rs 50,527 per 10 gram. Silver September futures were trading Rs 107 or 0.2 per cent down at Rs 54,608 per kg. Globally, yellow metal inched up as the dollar weakened slightly, while investors waited for a key decision on interest rates from the U.S. Federal Reserve which could influence the outlook for bullion, amid growing worries over the state of the economy, according to Reuters. Spot gold firmed 0.1% to $1,718.97 per ounce, while U.S. gold futures dipped 0.1% to $1,716.70.
Bhavik Patel, Commodity & Currency Analyst, Tradebulls Securities
This week we have two important events for gold, First is FOMC meeting due today and second major event is release of the second quarter US GDP on Thursday, July 28. Market has already discounted 75 basis rate hike and tightening monetary policy has already push US economy into recession. Gold might not see sharp selloff now as U.S. central bank is closer to the end of its tightening cycle than it is to the beginning. Any sign that the Federal Reserve is relenting on rate hikes will be good for gold. Another factor that is brewing along with the recession threat in the US is potential sovereign debt crisis in Europe.
Last week the ECB announced a 50 basis point rate hike and also announced that it would continue to buy bonds from troubled nations to ensure the European bond market doesn’t fragment. There is also a contrarian view as sentiment in Gold is bearish and is at multi-year low. Gold market has seen $21 billion in bearish positioning since June 21. Market is extremely vulnerable to short covering when such heavy short positions are there. In MCX, gold has support around 50200 and resistance at 50900. Bias is neutral to bullish today.
Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services
Gold traded steady, as the dollar weakened slightly, while investors waited for a key decision on interest rates from the U.S. Federal Reserve which could influence the outlook for bullion, amid growing worries over the state of the economy. U.S. Treasuries rallied, a day before a likely Federal Reserve rate hike as investors grappled with growing economic concerns with signs of a looming gas supply crisis in Europe. The U.S. central bank is widely expected to raise interest rates by another 75 basis points at the conclusion of its policy meeting.
U.S. consumer confidence dropped to a near 1-1/2-year low in July amid persistent worries about increasing inflation and higher rates, which could undercut spending, pointing to slower economic growth at the start of Q3. The IMF has slashed its global growth forecasts and raised its projections for inflation, warning that the risks to the economic outlook are “overwhelmingly tilted to the downside”. Apart from the Fed policy meet, focus today will also be on the U.S. Core durable goods orders data. Broader trend on COMEX could be in the range of $1680-1745 and on domestic front prices could hover in the range of Rs 50,200-50,950.
Pritam Patnaik, Head – Commodities, HNI & NRI Acquisitions, Axis Securities
Today’s Fed rate decision and the Fed chairman‘s statements will establish the gold rate trajectory in the coming days. While a 75 basis point increase is largely priced in, a surprise increase of 1% or an extremely hawkish statement by the Fed concerning future rate decisions could send gold prices tumbling below the $1700 mark. That said, the market feels given the vulnerable situation that the global economy is currently in, the Fed will choose its words and monetary stance carefully. The Fed is expected to continue to raise rates, but at a gradually diminishing pace coupled with a recession trend globally, which could get gold prices back in focus. Expect gold to remain volatile for the day.
(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)