Gold prices in India today edged higher for the second day in a row after futures on MCX gained 0.43% to ₹51,910 per 10 gram. Tracking gold, silver also moved higher. Silver futures on MCX rose 0.78% to ₹69,503 per kg. In the previous session, gold futures had jumped 0.75% per 10 gram while silver had rallied 1.6% or about ₹1,100 per kg. Despite gold rising for two days, it remains significantly below record high prices of ₹56,200 per 10 gram, hit last month.
In global markets, gold prices remained flat today after a sharp rise in the previous session. Spot gold was flat at $1,956.17 per ounce after gaining 1% on Monday. A subdued dollar supported gold. Investors remained cautious ahead of US Federal Reserve’s 2-day monetary policy meeting that starts today. Gold traders are looking for more clues on on stimulus measures and inflation targeting.
“Gold has witnessed mixed trade reflecting choppiness in equity markets and US dollar index. We may see directionless trade continuing unless either side of $1900-2000/oz range is broken,” Kotak Securities said in a note.
“Additionally choppy trade may also be witnessed due to positioning for central bank meetings this week which may impact currency movement.”
It will also be the first meeting of Fed since Chairman Jerome Powell unveiled a policy shift towards greater tolerance of inflation, effectively pledging to keep interest rates low for longer.
The dollar index remained steady today after a sharp fall in the previous session. A weaker US dollar makes gold less expensive for holders of other currencies.
Among other precious metals, silver eased 0.1% to $27.12 per ounce, platinum was little changed at $954.50, while palladium dipped 0.2% to $2,308.81.
“Amid other factors, gold ETF flows have also been mixed indicating lack of confidence in investors. Gold may witness choppy trade unless there is more clarity in whether recent sell-off in equity markets continues or not. However, the general bias may be on the upside as US dollar could remain under pressure ahead of Fed meeting later this week,” Kotak Securities added.
Meanwhile, the UK government has won an initial Parliamentary vote on its controversial bill to violate the Brexit deal with the European Union. Gold is often used as a safe store of value during times of political and financial uncertainty.