Gold rate in India traded higher on Wednesday tracking gains in international bullion prices ahead of the US Federal Reserve’s interest rate decision and rising geopolitical tensions in the Middle East.

MCX gold rate rose by ₹300, or 0.43%, to ₹69,478 per 10 grams. MCX silver price traded higher by ₹586, or 0.69%, at ₹83,227 per kg.

In the international commodity market, spot gold was up 0.4% at $2,416.79 per ounce, gaining nearly 4% for the month. US gold futures rose 0.5% to $2,414.80.

“Market sentiment is mixed. However, a decline in US Treasury bond yields and a weakening greenback have buoyed bullion prices as traders await the Federal Reserve’s monetary policy decision on Wednesday. Additionally, investors are monitoring the upcoming releases of the ISM Manufacturing PMI and the Nonfarm Payrolls report for July,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

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Geopolitical tensions in the Middle East escalated after the killing of Hamas leader Ismail Haniyeh, revealed by the Palestinian militant group and Iran’s elite Revolutionary Guards. This prompted safe-haven demand for gold.

Meanwhile, investors await the US Fed’s fifth interest rate decision for 2024 later tonight after a two-day Federal Open Market Committee (FOMC) meeting. Wall Street expects the US central bank to keep the benchmark interest rates unchanged between 5.25% to 5.50% today and policymakers will lay the groundwork for a September rate cut.

Gold acts as a favoured hedge against geopolitical and economic risks and thrives in a low-interest rate environment.

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“Gold has support at $2,392 - $2,378 and resistance at $2,420 - $2,438. Silver has support at $28.05 - $27.80 and resistance at $28.55 - $28.74. In INR, gold rate has support at ₹68,310 - ₹68,050 and resistance at ₹68,830 - ₹68,980. Silver has support at ₹81,850 - ₹81,180 and resistance at ₹82,290 - ₹82,800,” Kalantri said.

Technical View

Gold is currently exhibiting a positive trend on the hourly timeframe, with prices trading above the 50-period moving average. This upward movement indicates bullish momentum, suggesting that buyers are in control. Traders might consider this as a potential opportunity to enter long positions, capitalizing on the ongoing strength, said Ajay Kedia, Director, Kedia Advisory.

Monitoring key support levels and any further upward price action can provide additional confirmation of this positive outlook, he added.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.