Gold prices opened on the Multi Commodity Exchange (MCX) on Wednesday at Rs 66,100 per 10 grams and hit an intraday low of Rs 66,100. In the international market, prices hovered around $2,203.35 per ounce.
Meanwhile, silver opened at Rs 75,915 per kg and hit an intraday low of Rs 75,775 on the MCX. In the international market, the price hovered around $25.63 per ounce.
Anuj Gupta, Chief of Commodity and Currency at HDFC Securities, said, “Gold moved towards a new high as the Federal Reserve kept rates steady and stuck to its forecasts of at least three rate cuts this year.”
Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold and Silver prices were trading steady yesterday ahead of the Fed policy meeting. The US central bank held its second Fed policy meeting of this year yesterday, where it kept the interest rate unchanged but announced some changes in the inflation and growth forecasts.”
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The Federal Reserve increased the inflation forecast to 2.6% and GDP from 1.4% to 2.1%; however, the dot plot showed three rate cuts for this year and next. The sentiment of at least a 75bps rate cut this year gave a boost to safe-haven assets, and the Fed also hinted at slowing the balance sheet runoff soon.
“After the Fed meeting, not much reaction was seen in the dollar index and US yields. However, bets for rate cuts in the month of June were moved up from ~50% to more than 65%, supporting the rally in gold and silver prices. It will now be important to see how the Fed officials prepare the market from here on,” said Modi.
Ravindra Rao, Head Commodity Research, Kotak Securities, said, During the March FOMC meeting, the Fed left the fed funds rate unchanged for a fifth consecutive meeting, while officials maintained their outlook for three rate cuts in 2024 suggesting they aren’t swayed by a recent uptick in inflation. Powell also said it would be appropriate to slow the pace of the Fed’s balance-sheet unwind “fairly soon.” COMEX Gold prices notched a fresh record high of $2225.3 per troy ounce in early Asian trading as the Fed policy meeting was perceived as dovish. Swaps are now pricing in nearly a full quarter point rate cuts for the June FOMC meeting and almost 90 bps of easing for 2024. Today, focus will be on US flash PMIs, weekly jobless claims and Bank of England policy meeting."