Gold prices gain against soft dollar ahead of key US Fed statement

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Gold prices gained on Wednesday amid a softer dollar ahead of a key US Federal Reserve policy statement that could provide cues on its pace of interest rate hike.
On MCX, yellow metal prices were up nearly 0.3 percent to touch Rs 50,634 per 10 grams on Wednesday. Meanwhile, Silver rates gained nearly 0.2 percent, mounting to Rs 58.954 per kg. Globally, Spot gold was up 0.2% at $1,650.62 per ounce, as of 0356 GMT.

The dollar index had dipped 0.2 percent in early trade, making the greenback-priced gold less expensive for holders of other currency. Arpund 12:30 pm, US Dollar Index Futures were down nearly 0.1 percent at 111.252. With this, the rupee rose five paise from its previous close to 82.64 on Wednesday.

Crude oil prices rose on Wednesday after data showed a decline in US crude stock. Brent crude futures jumped 1.3 percent to $95.8 per barrel at the last count. WTI futures were last trading 1.5 percent higher at $89.6 per barrel.

Also, Indian equity benchmarks BSE Sensex and NSE Nifty50 slipped into the red in choppy trade on Wednesday, minutes after opening higher.

Manoj Kumar Jain, Head-Commodity and Currency Research at Prithvi Finmart, expects gold and silver to remain volatile in Wednesday’s session ahead of the Fed meeting outcomes. He said, “Gold could hold its support level of $1,622 per troy ounce and silver could also hold $19 per troy ounce levels.”

Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said gold has support at Rs 50,380-Rs 50,150, while resistance is at Rs 50,840-Rs 51,080. Silver has support at Rs 58,280-Rs 57,510, while resistance is at Rs59,480– Rs 59,910.

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