Gold Prices Stabilize Ahead of US Fed’s FOMC Meeting

Gold Prices Stabilize Ahead of US Fed's FOMC Meeting

VoM News Desk | September 16, 2023 | 07:47 AM IST | Breaking News | Follow on Google News

Gold Prices Stabilize Ahead of US Fed’s FOMC Meeting. Image/Mint

Gold prices have remained within a broader range of $1,880 to $1,930 per ounce ahead of the US Federal Reserve’s Federal Open Market Committee (FOMC) meeting scheduled for next week. Despite the stabilization, gold has exhibited relative stability over the past week.

Several factors are impacting gold prices at this time:

1. Strong US Dollar: The US dollar has climbed to a six-month high, impacting gold prices.
2. Expected Interest Rate Hike: Market expectations of an interest rate hike in the US Fed’s FOMC meeting have put pressure on gold prices. Robust macroeconomic data, including an annualized rise in US headline inflation to 3.7%, has contributed to this sentiment.
3. US Fed’s Fight Against Inflation: The US Federal Reserve has taken a hawkish stance in its fight against inflation, which is affecting gold prices. The Fed is committed to maintaining its inflation target of 2%.
4. Gold ETF Flows: Gold ETFs (Exchange-Traded Funds) have witnessed both outflows and inflows over the past few months, with recent inflows providing some support to gold prices.
5. Currency and Interest Rates: The direction of the US dollar and US interest rates are closely linked to gold prices. Positive currency outlook and expectations of rising interest rates have influenced the gold market.

While gold prices have remained relatively stable, they are expected to experience greater volatility following the US Fed’s FOMC meeting. The outcome of the meeting will provide clarity on the trajectory of interest rates and the potential impact on gold prices.

Gold analysts are advising traders and investors to remain vigilant about the US Fed meeting’s outcome, as it will likely determine the short-term direction of gold prices. Despite headwinds, some experts anticipate buying interest in gold at lower price levels, especially if the US central bank signals the end of its aggressive interest rate hiking cycle.

Key technical levels for gold include support at around $1,880 and resistance at $1,930 per ounce. A break below $1,880 could lead to further downside, while a recovery above $1,930 may extend the rally.

In the Indian market, major support for gold price on MCX is around ₹58,000 per 10 grams, with resistance at ₹59,000. The price may rise to ₹59,700 to ₹59,800 per 10 grams if it sustains above ₹59,100 on a closing basis.

VoM News Desk

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