Gold prices in India jump today, still 10% down from record high; global rates flat ahead of US Fed meet  

Gold prices hit a record high of Rs 56,191 per 10 gram in August this year, since then the yellow metal prices have corrected over 9 per cent.

Gold prices today edged higher in tandem with Comex gold ahead of a two-day meeting of the Federal Open Market Committee (FOMC). While global prices were flat in today’s trade as optimism around COVID-19 vaccine lifted appetite for riskier assets. On MCX, gold October futures were trading Rs 183 or 0.36 per cent higher at Rs 51,502 per 10 gram while silver December futures were ruling at Rs 68,236 per kg. The Fed will meet on 15 and 16th September. “The market does not expect the policymakers to change guidance on how long the rates will stay near zero, still it will be an important event. The US dollar has continued to drift lower hence the outlook for the yellow metal in intraday is positive,” said Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers.

Gold prices hit a record high of Rs 56,191 per 10 gram in August, since then prices have corrected over 9 per cent. On Monday, Asian shares started on firm footing today as hopes of COVID-19 vaccine were rekindled after AstraZeneca resumed its phase-3 trial. Globally, spot gold was mostly unchanged at $1,941.11 per ounce. US gold futures were also steady at $1,948.30. According to Reuters, physical gold dealers in India were forced to offer discounts for a fourth straight week as bullion remained unattractive for most retail consumers. “We have observed an uptick in buying in ETF segments after a gap of a couple of weeks. Prices have remained in a narrow range signifying that the bulls are not overly aggressive at this point. We believe a similar trend may continue this week as well, with bulls active between the $1920 to $1950 level, while selling could be observed between the $1970 to $1990 level,” said Debajit Saha, Senior Analyst, Precious Metals at Refinitiv. Saha further added that the greatest area of vulnerability could be between the $1,990 – $2,018 level, as the bulls could start selling aggressively to surprise short term speculators.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.4 per cent to 1,248.00 tonnes on Friday. Among other metals, silver fell 0.3 per cent to $26.68 per ounce, platinum gained 0.4 per cent to $928.61, while palladium remained steady at $2,321.43.

Gold prices have remained relatively steady at around $1945. Late in the week gold gathered some momentum after the US Dollar weakened as ECB kept its policy unchanged and US unemployment came higher than expected. “However gold still is on the backfoot as repeated failures to cross 21-day moving average shows failures of bulls to gather momentum on the upside. The market will be waiting for policy strategies from FOMC on Sept 16 and any direction may come after the FOMC meet. Till then expect gold to trade rangebound,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online.

COMEX gold trades marginally higher $1955/oz after a 0.7 per cent gain last week. “Gold may remain range-bound to positive ahead of Fed decision later this week,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.